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Major deals expected to accelerate Manchester office market take up in Q2

Thursday, 19 May 2016

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Significant pending deals are expected to strengthen Q2 figures in the Manchester office market, according to a Bilfinger GVA report.

The property consultancy’s Big Nine: Quarterly review of the regional office occupier markets analyses regional city centre and out-of-town office activity in the Big Nine cities outside of London.

David Thwaites, Associate at Bilfinger GVA Manchester, predicts that more than one million sq ft will again be transacted by the end of 2016 for the third year in a row - which would be a first for Manchester and further testament to the city’s reputation as the number one business destination outside of London.

In Manchester city centre, take up was slightly below the five-year quarterly average at 196,533 sq ft of lettings for Q1. Key deals completed included Squire Patton Boggs (28,000 sq ft) at No.1 Spinningfields, Kacoo Fashion (25,000 sq ft) at Fabrica and Arup (16,000 sq ft) at 4 Piccadilly Place.

The slower than expected start to the year for the Manchester market is largely due to Freshfields’ anticipated 80,000 sq ft commitment at Muse’s One New Bailey not completing before the end of the quarter.

This major letting and the expected commitment from the Department of Work and Pensions (50,000 sq ft), Irwin Mitchell (20,000 sq ft) and Money Supermarket (20,000 sq ft) are likely to bolster second quarter figures.

David Thwaites added: “The lack of available Grade A stock coupled with the uncertainty over Brexit have been the two principle factors in contributing to a relatively slow start to the year. Although these factors will continue through to Q2 the number of sizeable requirements currently in the marketplace is as high as I can remember and should lead to an extremely busy end of year.

“With increased occupier demand and new schemes coming closer to completion we are confident that more than one million sq ft will be transacted by the end of 2016 for the third year in a row.”

Overall, regional office take-up across the Big Nine markets witnessed the strongest start to the year since prior to the economic downturn.

Figures in Q1 were anchored by significant deals. City centre office lettings dominated this period with Morgan Stanley securing the largest deal in the UK to double the quarterly average take-up in Glasgow.

Overall city centre and out of town take-up amounted to 2.3 million sq ft, 13 per cent above the five-year quarterly average. City centre total take-up comprised 1.47m sq ft, 17 per cent above the five-year quarterly average. Out of town total take-up amounted to 0.86m sq ft, 7 per cent above the five-year quarterly average.

For further information on the research please contact Carl Potter, Senior Director at Bilfinger GVA on 0121 609 8388 or email carl.potter@gva.co.uk or report author Giles Tebbitts on 0207 911 2670 or email giles.tebbitts@gva.co.uk