Rental levels for prime and secondary offices in central Manchester have increased to almost double those of city centre Liverpool in the last year, according to the latest annual office rents map from Colliers International.
The research shows that average rental levels for prime offices in central Manchester had increased by 6% to £34/sq ft and in Manchester South by 22% to £22/sq ft over the past 12 months.
Average rent for second-hand offices in central Manchester rose by 2% to £22.50/sq ft while jumping by 4% to £12.50 per sq ft in Manchester South, according to the annual map.
The rise in the average prime rental level for Manchester city meant it was almost double that for central Liverpool which rose by 6% to an average of £18/sq ft.
In Salford Quays where the average price of Grade A space rose by 5% to £22/sq ft and Warrington which saw a 3% rise in the value of its Grade A offices to £16.50/sq ft.
All other rental levels for both prime and secondary office space in key centres throughout the North West such as Chester and Preston were unchanged, according to Colliers.
On a national basis, the research revealed office rents throughout the UK increased on average by 6.5% with prime rents averaging £23.98/sq ft and secondary at £15.51/sq ft.
Colliers’ research also showed that across established UK office locations incentives were down 11% year-on-year and are now on average 20 months on a 10-year term for a 10,000+ sq ft unit.
Peter Gallagher, director of national offices in the Manchester office of Colliers International, said: “The year-on-year increase in both Grade A and secondary office space rental values in central Manchester is an inevitable consequence of the ongoing and historic imbalance between rising demand from local, national and international occupiers and an all-time low in the availability of new Grade A space as developers scramble to bring game-changing schemes to market.
“The availability of Grade A space in central Manchester dropped by 15% in 2013 and experienced a further marked decline in 2014, when it fell by 38% year on year despite the provision by Argent of 176,000 sq ft at One St Peter’s Square.
“Delivery of further Grade A space will be negligible throughout the second half of 2015 and into 2016/2017 with consequent and continued upward pressure on headline rental levels and reduction in tenant incentives.”