Manchester offices set for record year
Take-up in Manchester city centre is expected to reach 1.4m sq ft by the end of 2015, with several significant deals due to complete in the coming weeks.
Big contributors to the total in this quarter will be Addleshaw Goddard, which is due to finalise its lease of 40,000 sq ft within One St Peter’s Square, and international law firm Freshfields Bruckhaus Deringer, which has taken 80,000 sq ft in English Cities Fund’s One New Bailey.
An additional 150,000 sq ft of smaller lettings are also due to complete.
At the end of September take-up in the city centre had reached 1.05m sq ft. The annual total for 2014 was 1.3m sq ft, at the time also a record.
Freshfield’s decision to relocate some of its back-office functions from London to Manchester has been one of the biggest office stories of the year, and many expect it to signal the start of a trend of ‘north-shoring’, as occupiers seek to avoid increasing costs of renting in the capital.
According to Richard Lace, associate director of OBI Property, 2016 could see north-shoring go beyond just the big financial and professional services occupiers.
Speaking to Place North West, Lace said: “In 2016 we should see not just professional services but also tech companies looking to relocate from an overheating London. If you look at the rents being achieved now in the likes of Shoreditch it’s not hard to see the appeal.
“This year has also seen a consistent trend of smaller professional service occupiers opening their first Manchester office, with a range of deals at sub-5,000 sq ft.”
The year was defined by big investment transactions, according to Chris Cheap, senior director at Bilfinger GVA. “The investment market has stolen the march this year, thanks to the sheer amount that has changed hands,” he said. “This of course links to the occupational market, and is a big contributor to how we are looking at topping 1.3m sq ft for the second year in a row.”
To finish what has been a significant year for office disposals, with £705m recorded by the end of Q3, the sale of Argent and Greater Manchester Property Venture Fund’s One St Peter’s Square to German pension fund Deka Immobilien is due to be finalised before Christmas. The sale price is understood to be more than £130m.
The first half of 2016 looks set to be strong in terms of lettings, with several large requirements in the market hoping to be filled in the next six months. Hewlett Packard is looking at either English Cities Fund’s One New Bailey or Ask Real Estate’s 101 Embankment for 60,000 sq ft of offices. A long-mooted requirement for Lloyds is rumoured to have returned, for around 40,000 sq ft, while MIDAS has been tasked with finding up to 100,000 sq ft for a financial and professional service firm, understood to be Volkswagen Finance, which is currently based in Milton Keynes.
Moneysupermarket.com is looking to relocate out of its long-term base in Flintshire, and is choosing between Liverpool and Manchester for an office of up to 80,000 sq ft.
Let Moneysupermarket go to Liverpool, we need more balance between the two cities for office development and Liverpool offers many advantages .
By BayBoy
Logic would put money supermarket in Liverpool given the ethos of the business in the context of office rents in Liverpool vs Manchester.
By CMW
Manchesters rents are only going higher, so why not locate to Liverpool instead? loads of good city centre locations with everything you could want at your fingertips from shops, beaches, excellent transport links, affordable large houses, parks, and very cheap rates and rents per sq metre
By Skyhigh
It’s almost a chicken and egg with Liverpool though, no prime office space available at the quantity MoneySuperMarket require and not enough in the pipeline to make it a proper consideration.
In a way, I guess speculative development will be the only thing to bring Liverpool to an uptake more in line with that of our friends in Manchester.
By J
Skyhigh – because that’s not how it works. Companies don’t locate somewhere primarily based on the fact that that place has low rents. Liverpool has low rents because there’s very little demand for businesses to move there – this could be because of a number of things: poor external transport (Liverpool is a tiny airport and you can only get to a very limited number of destinations from Lime St) may be one of those things. Either way, there’s far more demand for businesses to be located in the much larger Manchester
By Newcastle
Quality of life will win out in the end and Liverpool’s amazing city landscape will ensure that investment is secured in the office sector too. Skyscrapers in Pall Mall will look right over Liverpool Bay, in Manchester there is nothing to see.
By BayBoy
If rents in Manchester get too high for North-shoring companies then the next city to benefit will be Leeds. Companies need access to staff at the end of the day, the larger cities will benefit.
By Sparks
Are there any Grade A 80k Sq ft spaces available in Liverpool? Looks like another one headed East.
By Midway
ByBayBoy. Is all Liverpool can offer a view out of a window? Most employers would expect their staff to be more interested in their work.
By Mrs Richardson
It’s a shame it gets so nasty when anyone talks about Liverpool’s advantages. The north west as a whole will benefit when two cities are better balanced.
By Salford Lad
Liverpool’s ahead of Leeds on the devolution front and the city id 1.5 million without it’s Cheshire hinterland or half of South Lancashire.
By Halton
Liverpool is as big as Leeds according to the Hestletine Report ‘Rebalacing Britain’. Liverpool grew out as a city and region from a central core and is therefore sui generis. The Manchester conurbation was formed by different industrial settlements, the Mill Towns, merging together.
By Paul Blackburn (Chester)
Greater Merseyside is not a proper city either historically or presently; the economic links between its constituent boroughs are weak with a number of semi-independent economic centres such as Chester and Daresbury. This is one of the main reasons that dedicated HS2 infrastructure will go into Lime Street, the business case simply does not stack up. It might be more sensible to look at building more Grade A space in Chester at the moment.
By Grade A
I believe William Jessop House, Peel’s Princes Dock development, is 100,000 Sq ft and has planning, so moneysupermarket could go there if they have time for it to be built.
Liverpool has a smaller airport than Manc, but then it’s bigger than Leeds/Bradford airport yet Leeds is a bigger and more powerful city those these things don’t always collerate. Meanwhile Lime Street is hardly a branch line.
The city region boroughs have both long and contemporary ties. The only one really independent is St Helens, similarly as Wigan has sod all to do with Manchester. Daresbury is a village outside Runcorn, a Liverpool new town, with easy links to the south if the city, just because it’s pretty successful and Manchester likes to claim it doesn’t make it so. Similarly Chester ain’t part of the city Region and no one said it is.
By HJM
HJM, perfect response. Brought a tear to my eye that
By Uni