CBRE: Manchester office rents will rise by end of year
Rental values for Grade A office space in Manchester city centre held firm at £28.50/sq ft during the second quarter of 2008 but are set to rise to £30/sq ft in the second half, according to research by CB Richard Ellis.
John Ogden, director of office agency at CBRE, said: "Although rents have stayed static for the second year running, there has been strong upward pressure and we fully expect rents to push £30.00/sq ft during the second half of the year.
"Take-up during the first six months of the year reached 342,265 sq ft, which is slightly below par on last year's performance and the 10-year average of 805,880 sq ft. However, activity over the run-up to Christmas looks set to push take-up to around 1m sq ft for the year as a number of under-offer deals complete and active requirements are satisfied.
"It's great to see the office rental market is holding its own, despite difficult market conditions, and with over 800,000 sq ft due to be completed by the end of the year there is certainly plenty of opportunity for businesses and government departments looking to relocate within Manchester."
Supply of available and ready to occupy space is above average at 1.28m sq ft, CBRE said, although it remains well matched against demand after several years of chronic under supply of quality stock and over 300,000 sq ft is already accounted for in pre-lets or under offer.
Ogden added: "Market activity has been dominated by professional services and banking and finance with the largest take-up of the period, 50,000 sq ft for the Bank of New York at 3 Hardman Street.
"We anticipate in the order of 350,000 sq ft of Grade A office space to be taken in Manchester by the end of the year, and the total take-up is likely to exceed the five-year average of 850,000 sq ft."