Manchester

There has been another robust quarter of occupier activity across all Manchester office markets, similar to the past 12 months, although down on the heady levels pre-pandemic.

Q3 take-up amounted to 257,164 sq ft in the city centre and 176,266 sq ft out-of-town. This brings the total for the year to 1.2 million sq ft, 20% below the ten-year average for the same period but up by a third on 2020 demand.

Similar to other cities, there has been a healthy proportion of grade A take-up. The largest deal of the quarter was to Cloud Imperium taking 87,130 sq ft at Manchester Goods Yard and there were two lettings at Circle Square to Accenture (25,000 sq ft) and Ofcom (9,400 sq ft).

Overall, the sub 10,000 sq ft market continues to perform well but there has been a lack of mid-size deals this quarter, while larger transactions have been slow to progress. However, there are number of large deals in the pipeline, such as those under offer at Circle Square to Roku (100,000 sq ft), Uber (20-30,000sq ft) and Octopus Energy (20-30,000 sq ft). In addition, there are further known public and private sector requirements and increasing activity in the tech sector, to occupiers such as SG Gaming. Expectations are that year end city centre take-up will comfortably exceed 1 million sq ft.

With key schemes completing and space returning to the market, there is now a significant choice of space available to occupiers. The Manchester vacancy rate has increased to 11%, up from 6% at the end of 2019 but still some way off the cyclical high of 15% in 2013.

There are a number of speculative schemes completing this year including 102,000 sq ft at the Lincoln Building, 80,000 sq ft at 11 York Street and around 100,000 sq ft remaining at Circle Square. In addition, there is further space coming forward next year at Hermes’ 198,000 sq ft 4 Angel Square.

In the pipeline HBD and GMPVF have submitted plans for net zero carbon 100,000 sq ft The Island and progress continues on the repurposing of department stores to mixed use schemes, such as the former Kendal Milne / House of Fraser building and Debenhams.

Headline rents are holding up at £38.50 psf. With the increasing demand for managed workspace at the smaller end of the market, landlords are receiving a premium above these rents for providing an element of fit-out.

TAKE UP: Q3 2021

City Centre

257,164 sq ft

Out of Town

176,266 sq ft

HEADLINE RENT

City Centre

£38.50 per sq ft

Out of Town

£24 per sq ft

UNDER CONSTRUCTION

Total

1,311,339 sq ft

Prelet

46%

PRIME YIELD

Q3 2021

5%

TOP FIVE DEALS: Q3 2021

KEY SECTOR ACTIVITY: 12 MONTHS TO Q3 2021

Telecommunications

18%

Computing & software

12%

Flexible workspace

9%


TAKE-UP

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