Colliers: Manchester office take-up close to 2007 levels

A dramatic rise in the amount of new office space let this year will help take-up reach 950,000 sq ft, only 2% down on last year, according to Colliers CRE.

Colliers' winter report said Grade A, or new-build, net stock absorption was over 540,000 sq ft in the second half of 2008, thanks largely to the imminent completion of the 350,000 sq ft 3 Hardman Street in Allied London's Spinningfields.

All but 10,000 sq ft of 3 Hardman Street is let, helping to lift Grade A occupation by 420,000 sq ft year on year.

The total amount of Grade A stock in the city centre reached 4.2m sq ft in December 2008, or 25 % of the total city centre market. This is a slight gain from 22% in December last year.

The report continued: "Despite the rise in Grade A occupation, availability has continued to rise. Year on year Grade A availability has risen by 75% as over 700,000 sq ft of speculative space has completed in Central Manchester. A further 200,000 sq ft is anticipated to come to the market in Q1 2008 with completions at Ask Property Development's First Street, 180,000 sq ft, and Brookfinch's Margolis Building, 22,000 sq ft."

Overall office space has risen by 25% in the past six months. Availability at the year-end will be close to 2.5m sq ft, due to completions at Belvedere House, 103,000 sq ft, Magnum House, 65,000 sq ft, Chancery Place, 105,000 sq ft.

The economic downturn has led to a "marked increase" in the amount of second-hand space and sublet space coming to market.

Colliers said the last deal in excess of 100,000 sq ft was to Barclaycard in July 2006 at 3 Hardman Street. There are still a number of healthy requirements in the market; Premier Foods, accountants Trevor Jones, PKF and Atkins among them.

Headline rents remain at £28.50/sq ft.