With over 100,000 sq ft of office lettings completed in Manchester City Centre since the start of the year, occupiers are in a race for space as supply is severely constrained following a record year for take-up in 2018 with 1.75 million sq ft leased.
Dominic Pozzoni, Director at Colliers International, said; “We are witnessing a frenetic element to the Manchester office market at present and have even seen gazumping of space occurring as occupiers rush to secure Grade A space. 2018 was a record year for take-up, well exceeding the 10 year average and as a result supply is limited for occupiers seeking to take space in the next 12-18 months.”
Five significant transactions have reduced supply already in 2019 with General Medical Council taking 22,000 sq ft at 3 Hardman Square, HPE leasing 20,000 sq ft at No.1 Circle Square, Money Supermarket signing up for circa 22,000 sq ft at No. 1 Spinningfields, Aldermore Bank expanding into an additional 20,000 sq ft at 40 Spring Gardens and Knights Solicitors taking over 16,000 sq ft at Two St Peter’s Square.
Neil Mort, Senior Director at CBRE said; “The notable deals completed so far this year have all been around the 20,000 sq ft mark and as a result the availability of large floorplates across the city has dwindled. If an occupier is seeking a floorplate of 13-15,000 sq ft then there are only a handful of buildings to accommodate them in the City Centre this year, one of which is Landmark at St Peter’s Square, which will complete in Q3 2019. Landmark and 125 Deansgate are the only two buildings set to complete this year placing them in an incredibly strong position.”
With less than 300,000 sq ft of Grade A space due for completion this year and with annual Grade A space take-up averaging 400,000 sq ft, it is possible that there might be no Grade A space available by the end of 2019.
Manchester undoubtedly remains the strongest and most active city centre office market in the UK outside of London and there is strong occupier demand looking to 2019/20. The city is also benefitting from significant investment into major infrastructure projects such as the growth of Manchester Airport, the extended Metrolink system, the second city crossing and other major national and regional rail network improvements. Coupling the excellent infrastructure and new office schemes set to complete in 2019 with Manchester’s extensive, highly skilled and cosmopolitan workforce and the 35,000 graduates coming out of Manchester’s Universities every year, Manchester remains the number one choice for occupiers looking to open offices outside of the nation’s capital.