Occupier demand for new office space held firm in the first quarter of 2008 compared to last year, according to a new report from Jones Lang LaSalle.
The Jones Lang LaSalle Manchester Offices Update for Quarter 1 2008 said take-up was 200,000 sq ft; similar to Quarter 1 2007.
Despite the current economic climate, requirements for space over 15,000 sq ft have increased, the report said, and the continued activity witnessed by the banking, finance, legal and accounting sub-sectors is set to help diminish the city's projected supply pipeline.
Trevor Sloan, head of JLL's office agency team in Manchester, said: "City centre demand continues to be strong, especially for requirements for space over 15,000 sq ft. We expect there to be more deals in this bracket than 2007 which will drive demand and push headline rentals this year."
Over the remainder of 2008, JLL's analysis showed that 834,060 sq ft of speculative office space is scheduled to complete. With the limited supply of available Grade A space, a significant amount of this is already under offer, which will help absorb the pipeline. As a result, large rises in vacancy rates for Grade A space, which currently stands at 8%, are not predicted.
Sloan concluded: "Additional new space from completing developments is helping to facilitate deals, and several large transactions are currently on the verge of completion; which will boost take-up figures for Quarter 2. With the current strong occupier demand, and much less space scheduled for completion in 2009, we believe this will help protect the market against potential oversupply."