Office take-up in Manchester city centre was 20 per cent above the five-year quarterly average between January and March 2015, according to the new research from leading commercial property adviser Bilfinger GVA.
Across the UK cities surveyed in Bilfinger GVA’s ‘Big Nine: Quarterly review of the regional office occupiers markets’ , Manchester dominated quarter one activity with above-average activity in the city centre and out of town.
With the three largest city centre deals secured this year across the ‘Big Nine’ cities, Manchester’s take-up was around 20 per cent above the five-year quarterly average. PWC’s move to No 1 Spinningfields was the largest city centre deal at 49,400 sq ft.
Also leading the out-of-town office figures, Manchester made up 40 per cent of all take-up with two large deals at Salford Quays, including BUPA’s 120,000 sq ft pre-let deal at Peel’s Harbour City and UK Visas and Immigration’s move to Soapworks.
Across the UK’s Big Nine cities, office take-up remained five per cent above the five-year quarterly average, with total take-up totalling almost two million sq ft. There was an appreciable slow-down in city centre take-up, which at 1,095,800 sq ft made up 56 per cent of the total, which was five per cent below the five-year quarterly average.
Headline net effective rents have on average increased by 11 per cent across the nine cities over the year to Quarter One. Robust occupier demand and a shortage of Grade A supply for the next 12 months are forecast to put further pressure on rents and incentives.
The supply gap is evident in Manchester. The next development cycle is underway with over 850,000 sq ft under construction, including No 1 Spinningfields following the 50,000 sq ft pre-let to PwC. However, no schemes will complete until the second half of 2016. Sentiment remains high as strong demand over the past 18 months prompted a number of requirements. Major enquiries include lawyers Freshfields (90,000 sq ft) and AVIVA (15,000 sq ft).
David Thwaites, Associate at Bilfinger GVA Manchester, commented:
“Although Quarter One take-up levels for other cities have been generally mixed, Manchester continues to lead the way with several standout transactions (PWC and Ernst & Young,) with a healthy level of ‘churn activity’ since the turn of the year.
“With a number of pre-let opportunities and large requirements still to be satisfied, the city centre is set for another strong year. Shortage of quality stock remains an issue, but take-up for 2015 should still exceed one million sq ft, which will again reinforce the city’s reputation as the number one business destination outside of London.
“The out of town regional markets and in particular Salford Quays have also enjoyed a strong start to the year with a 63 per cent increase in take up from the corresponding period in 2014.”
