Manchester leads on lettings, Birmingham rents surge  

Avison Young’s Q1 2026 Big Nine report into major office markets showed the strongest first quarter for investment since 2022, with transactions totalling £477m.

Investment volumes were boosted by three transactions topping £50m, including the Bank of New York Mellon’s £114m owner-occupier acquisition of 4 Angel Square, Manchester. Melford Capital also paid £78m for its third regional office in three years, at Waverley Gate, Edinburgh.

Manchester and Bristol were the best performing cities for leasing activity in Q1, with Manchester’s take-up hitting 446,200 sq ft, helped by the Government Property Agency’s keenly-expected 115,000 sq ft deal at Havelock landing.

The figure is larger than those reported by other organisations, as AY’s ‘Manchester’ figures also include south Manchester, Salford Quays and Warrington.

Liverpool’s take-up was around 78,000 sq ft, 31% down on the previous quarter, as a lack of 10,000 sq ft-plus deals hit. Large requirements in the market should land later this year, AY said.

Also affected by a lack of 10,000 sq ft-plus deals was Newcastle, which recorded 98,800 sq ft, 29% below the previous quarter and 48% below the 10-year average.

Total Q1 take-up in Leeds was 88,900 sq ft – 63% below the 10-year average – while Birmingham reached 143,464 sq ft in a quarter that saw the city centre match the five-year average but the decentralised market record just 36,470 sq ft.

Along with Bristol, Birmingham saw the largest jump in prime rental growth, with both cities reaching £52 per sq ft – Birmingham’s progress representing a 12% leap.

The new mark was achieved with law firm Eversheds Sutherland’s 40,000 sq ft move to Three Chamberlain Square.

Across all markets, average prime rents increased 2% to £41.56 per sq ft, with rents continuing to rise in locations with the strongest ESG credentials, transport connectivity and efficient operational costs.

Sectors driving occupier activity included professional services (26%), government and services (19%) and TMT and creative (17%).

For occupiers in search of best-in-class space, grade A vacancy remains constrained at 2.7%, AY said. 2.7m sq ft of office space remains under construction across the Big Nine, with a spike in completions due for 2027.

The most significant completion of Q1 came in Leeds, where 75,000 sq ft was delivered at Kellstone, Aire Park – 63% of which was let prior to completion to Eversheds Sutherland.

Manchester, Birmingham and Leeds are the three cities among the Big Nine (which also includes Glasgow, Bristol, Edinburgh, Newcastle, Cardiff and Liverpool) with most office space due for completion over the next three years – although in all markets, the expected numbers are well below historic averages.

Guy Spencer, director and head of national capital markets at Avison Young, said: “The first quarter has set a strong tone for the year, with confidence building across regional markets such as Manchester, Bristol and Edinburgh.

“Appetite for prime, centrally located assets with secure income remains resilient, particularly where supply and demand imbalances are most acute, continuing to place upward pressure on rents. At the same time, constrained development pipelines across the Big Nine are reinforcing competition for high-quality space.

“Looking ahead, the market is entering a more nuanced phase. Heightened global headwinds are expected to keep inflation elevated, which is likely to sustain higher borrowing costs for longer. This may temper activity among debt-reliant investors and weigh on larger transactions, although well-capitalised buyers with a long-term view will continue to find opportunities.”

Rupert Barron, director in AY’s Manchester office agency team, added: “Manchester continues to set the pace as the strongest regional office market outside of London, underpinned by sustained demand for best-in-class, city centre space.

“The GPA’s full letting at Havelock is a clear example of the scale and confidence we’re seeing, with major occupiers considering early commitment to developments, as seen at St Michael’s or Circle Square, and rumours surrounding the 800,000 sq ft Manchester Digital Campus planned for 2032.

“More broadly, this trend is playing out across other regional markets, where high-quality supply remains limited and competition for Grade A space is intensifying. Cities like Birmingham, Bristol and Glasgow are seeing similar dynamics, with strong fundamentals, including connectivity and talent bases, continuing to attract occupiers and support further growth in activity.”

• View the Big Nine report here