Manchester steals office market scene for Q4 2016

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Chris Cheap, Regional Senior Director of GVA’s Manchester office

The Manchester office market is set for another strong year according to GVA’s latest Big Nine report, as the city continues to outperform in the regional office market and take-up across the Big Nine markets in 2016 reached the highest level during Q4.

The quarterly review of the regional office occupier markets reports how Manchester continues to strive ahead with take-up amounting to 2.2 million sq ft across the city centre, while out-of-town locations recorded more than a million sq ft.  Activity was underpinned by the 165,000 sq ft deal to Swinton Insurance at 101 Embankment.

While in Liverpool out-of-town take-up amounted to 55,000 sq ft, well above the five year quarterly average of 42,991 sq ft, with a key deal going to Kura who took 34,201 sq ft at Caspian House in Atlantic Park.

According to the latest Big Nine report, overall take-up across all of the Big Nine cities during 2016 totalled 8.7 million sq ft, 3% above the five-year average.

This was significantly boosted by activity in Manchester which saw an above trend performance, despite EU referendum uncertainty.

Total city centre take-up in Q4 reached 1.67 million sq ft, 30% up on the five year quarterly average and the highest city centre quarterly take-up for a year. Manchester accounted for a third of the take up, whilst Bristol and Cardiff both saw 100,000 sq ft plus headline deals, with HMRC at 3 Glass Wharf and Hugh James Solicitors at 2 Central Square, respectively.

Q4 out-of-town take up amounted to 0.86 million sq ft, up by 4% compared to the five year quarterly average. As with the city centre, Manchester accounts for a third of this, however take-up was also well above average in Bristol, Edinburgh, Glasgow and Liverpool. A key deal in this market was Balfour Beatty taking 43,568 sq ft at Maxim 7, Eurocentral, Glasgow.

Chris Cheap, Regional Senior Director of GVA’s Manchester office, said: “In Manchester city centre almost as much space was transacted in the last three months as the rest of the year, something of a surprise in the sheer number of transactions.

“The headline grabbing Swinton deal provided a strong platform for the large number of sub 5,000 sq ft transactions which took place across all grades. This is testament to the strength of the central Manchester market place which has now seen three consecutive years of take-up in excess of 1 million sq ft.

“In the first month of 2017 we have seen some significant office requirements emerge which suggests that the frenetic leasing activity will continue.”

During 2016, take-up amounted to 8.7 million sq ft across the Big Nine city centre and out-of-town office markets, 3% above the five year average. Cardiff, Manchester and Bristol performed the strongest over the year when compared against the five year averages. Manchester continues to outperform, with take-up of 2.2 million sq ft across all city centre and out-of-town locations, while the latter two both recorded over a million sq ft.

Professional services sectors were the most active during 2016, making up 27% of all deals over 5,000 sq ft, while financial services made up 19%, with insurance and asset management being particularly strong. The recent strong growth seen in the TMT sector was not sustained during 2016, accounting for 10% of deals, compared to a five year average of 16%.