GVA: Manchester and Liverpool office market update

The Manchester office market has slowed but still managed to outperform other regional centres, including Liverpool, in the first half of 2013, according to the latest analysis from GVA.

GVA's Big Nine report highlights "significant optimism" in the regional office markets as the upturn in confidence and a more stable economic position filters into occupier business strategies.

The Big Nine reports that regional city centre take-up levels were 14% above the five-year quarterly average. Take-up in Q2 was almost twice the average in Leeds and well above average in Birmingham and Bristol.

In Liverpool, take-up was below the five year average of 70,611 sq ft at 55,000 sq ft. Take-up in Manchester of 157,472 sq ft also fell below the five year average of 288,097 sq ft.

City centre and out of town take-up combined in the nine GVA regional office centres recorded 1,730,000 sq ft in deals for Q2, 7% above the five-year quarterly average.

The city centre market made up 67% of this total and recorded take-up of 1,161,000 sq ft, 14% above the five-year quarterly average. Unfortunately, in Q2 the out of town market dropped 5% below the quarterly average.

The city centre office market has seen strong take-up over the second quarter of the year, with most cities above the five-year quarterly average.

Activity was particularly strong in Birmingham, Leeds and Bristol and the three largest deals were recorded in these cities, including GVA's 134,000 sq ft letting of Five Brindley Place.Referring to Manchester, GVA's report states: "The first two quarters of 2013 have seen a continued healthy level of activity in central Manchester but this has largely been confined to smaller transactions.

"Grade A demand continues to be reduced in line with limited supply, although with in excess of 150,000 sq ft of prime space close to or under offer, the position will change over the next three months.

"This figure excludes the ongoing 'Project Tomorrow' (120,000 sq ft plus) requirement which gets ever nearer to becoming a reality."

Chris Cheap, Head of North West Offices at GVA, said: "The year started with significant levels of activity within the central Manchester office market.

"This slowed slightly in the second quarter. However, the half year figure still reflects a dynamic performance which is in line with, or outperforms, other regional centres.

"With a significant amount of office space, especially within the Grade A sector, under or about to go under offer, it appears that the market place will continue on its up curve through the final two quarters of the year.

"Grade A supply continues to be the real pressing issue with diminishing existing stock and only one building which is not entirely pre-committed under construction."

Referring to Liverpool, GVA's report states: "In Liverpool Pershing have recently taken 28,000 sq ft at the Royal Liver Building and there are two major refurbishment projects on site at India Buildings and Exchange Station, which will provide good quality refurbished space to accommodate future occupational requirements.