Manchester city centre take-up jumps ahead
MANCHESTER city centre office take-up surged to 484,000 sq ft in the second quarter, almost double the quarterly average, according to the latest figures from commercial agent GVA.
Its Big Nine report, which looks at quarterly trends in the main office markets, found total take-up was 15% above the five-year quarterly average, at 2.85 million sq ft. Out-of-town take-up was 19% above the quarterly average at 819,500 sq ft.
Take-up in Manchester was up from 250,000 sq ft in the first quarter.
Growing demand in Manchester, fuelled by major deals such as Slater & Gordon’s decision to take Cobbetts’ former 100,000 sq ft office in Mosley Street, is putting increasing strain on existing stock. Around 250,000 sq ft of Grade A space is available in Manchester, with a further 200,000 sq ft nearly complete.
Chris Cheap, head of Office Agency for GVA in the North West, said: “Sector-specific growth in the UK’s economy has begun to feed into the need for companies to grow their office space. This is very different to the experience of the mid-2000s, when the vast majority of new-build, capital growth and investment decisions were being made based on the continued belief that values would increase – irrespective of occupier demand.
“In terms of Manchester, it looks like we are finally starting to see some Northshoring – the movement of jobs out of the expensive south east. This is very healthy, but the challenge this spike in occupier demands presents is significant absorption of available office stock – particularly those with rents below £24/sq ft. The depth of demand is coming from new high-density service occupiers, who are looking for value-for-money space outside London on short delivery horizons, but that market has become extremely tight.”
