New figures released by the Manchester Office Agents’ Forum (MOAF) show that Manchester city centre office take-up in the first three months of this year (Q1) totalled 306,492 sq ft across 58 deals, representing the third consecutive year that Q1 activity has exceeded 300,000 sq ft.
Major lettings were seen at schemes including Bruntwood SciTech’s new Circle Square development where a total of 67,348 sq ft was let in four separate deals to Northcoders, HPE, Accenture and Hilti, who secured 42,559 sq ft in the largest single Q1 transaction. Further highlights saw Sopra Steria and Marker Study take a combined total of 52,260 sq ft at M&G’s Arndale Tower, which is now fully let; Fore Property’s Windmill Green secure flexible workspace operator, Hana, along with OneStream who signed up to a combined 36,677 sq ft and Boultbee Brooks’ Core, who secured Bet 365 into 25,029 sq ft of offices.
Occupier activity in the Salford Quays and Old Trafford market totalled 111,916 sq ft of transactions across 19 separate deals, which was twice the level of activity for the same period of 2019. Five deals in this market were over 10,000 sq ft and included HMCTS at Metro, Chep at Think Park and Bibby Financial and QA Consulting both taking space at The Anchorage. The largest transaction to complete was the 21,400 sq ft letting to BES at Peel’s Adamson House.
In South Manchester, office take-up in the first quarter totalled 105,881 sq ft transacted across 32 separate deals. This included two freehold sales: Connel Utilities purchased the 12,300 sq ft Artemis House in Stockport and Place First acquired 123 Clarence Road in Longsight, comprising 20,387 sq ft.
MOAF noted that despite the continuing government restrictions, which have effectively put a temporary hold on activity, there has been very little fall-out in terms of occupier demand impacting future office transactions. The Forum cited that the robust fundamentals of Manchester’s city centre office market will continue to attract inward investment and more importantly stimulate growth within its indigenous SME community.
The Forum also highlighted that the office supply levels of both new-build and refurbished schemes have been carefully maintained to run alongside annual average take-up levels in excess of 1.3m sq ft. MOAF predicted that when a level of normality returns it will be very much ‘business as usual’ with headline rents remaining on course to break £40.00 sq ft alongside the continued stabilisation of rent-free incentives.
Richard Wharton from JLL commented: “Activity seen in the first three months of 2020 demonstrates the strength and depth of the Manchester city centre office market with lettings seen across a range of office schemes including new-build development, refurbished buildings and a new flex operator – Hana – entering the market. Although there may be challenging times ahead, we believe the underlying demand from major corporate occupiers looking to expand and relocate into the city will remain strong. When we return to normality, we expect that delivery of new-build and refurbished schemes will continue apace.”
Nick Nelson of Sixteen added: “There has been an inevitable handbrake on new activity which will stay until there is a return to a semblance of normality. It is however positive to note that the majority of leasehold deals that were close to transacting are still moving along in the background.
“It is understandable that companies both small and large are concentrating on more pressing issues with cashflow and staff retention rather than property initiatives. Companies should however look into the government support measures as and when the finer detail is made public and engage with their landlords in respect of rental holidays, deferments or monthly payment plans.”
MOAF is made up of Avison Young, BE Group, CBRE, Colliers International, Canning O’Neill, Cushman and Wakefield, Edwards and Co, Hallam Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI, Savills, and Sixteen.
