Matillion has signed a 10-year lease on space at Two New Bailey. Credit: via Inform Comms

MOAF: Manchester office market cools after red hot Q4 

After a bumper end to 2022 saw 427,000 sq ft of deals complete in the city centre, take-up in the first three months of this year has dropped to 211,000 sq ft, according to the Manchester Office Agents Forum. 

The amount of office space transacted in Manchester in the first quarter of 2023 is up slightly year-on-year compared to the 206,700 sq ft recorded in Q1 2022. 

In total, 59 city centre office lettings were inked in the first quarter of the year. These included chunky deals at Barings’ Landmark and New Bailey over the border in Salford. 

Starling and Vanguard both signed for 14,000 sq ft at Landmark, while the Competition & Markets Authority and Matillion took 17,000 sq ft and 27,000 sq ft at Salford City Council’s One and Two New Bailey respectively. 

Daniel Barnes, office agency director at Savills Manchester, said the dip in the amount of space let was expected but remained confident activity would pick up. 

Following a strong Q4, with many of the larger deals in the market completing, Q1 has inevitably got off to a slower start,” he said. 

“However, we have continued to see a good churn of deals throughout this quarter and with a number of larger requirements entering the market, we expect to see an uplift in both transaction volumes and size over the coming months.” 

Outside of the city centre, South Manchester saw a total take-up of 135,000 sq ft across 84 deals. The two largest transactions saw Barratt Homes take 10,000 sq ft at Adamson House and Essity sign for  9,600 sq ft at Ocean House on Towers Business Park. 

Salford Quays and Trafford saw 64,446 sq ft of take-up in Q1 across 18 transactions. More than half of this came when the University of Bolton took 36,000 sq ft at Bruntwood’s Valo. 

Richard Dinsdale, office agency director at Edwards & Co, said: “The South Manchester region has experienced a strong start in 2023, almost doubling the Q1 take up in 2022, with the Towers in Didsbury claiming the two largest lettings from a healthy total of 84 transactions.  

“There is also a steady stream of larger requirements in the market at present, standing South Manchester in good stead for the rest of 2023.”   

MOAF was formed in 2009, and members include Avison Young, BE Group, CBRE, Colliers International, Canning O’Neill, Cushman & Wakefield, Edwards & Co, Hallams Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI, Savills, TSG Property Consultants, and Sixteen. 

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Whilst offers may have cooled it’s important to remember the majority of new office buildings in particular no longer need pre-lets, even after Covid. Over 80% of proposed commercial blocks and those under construction are speculative. This is huge for Manchester and a regional city. It shows confidence in the market. We certainly arent done yet, not by any means.

By Andrew

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