The Manchester Office Agents Forum has predicted that office rents in Manchester will rise as landlords reduce the incentives on offer.
The forum said within the first quarter of the year 191,598 sq ft of space was taken up which was marginally below the long term average and eroding the available stock by 15%. South Manchester sub-regional take up was also strong at 170,256 sq ft.
Simon Reynolds, acting chair of the forum, said: "Considering recent economic events, the statistics highlight the city regions underlying strength. The consensus view is that we will start to see a hardening of Prime rents and a reduction of incentives on offer as existing new stock is taken up. Secondary refurbishments will follow the trend within 12 months. It will be interesting to see what our next quarter's stats show."
The Manchester Office Agents Forum aims to promote better knowledge of the Manchester city regional office market, and provides market statistics as well as informed market commentary.
Formed in 2009, the forum's current members includes:
- CB Richard Ellis
- Canning O'Neil
- Colliers CRE
- Cushman Wakefield
- Drivers Jonas Deloitte
- Edwards & Co
- GVA Grimley
- Jones Lang LaSalle
- King Sturge
- Knight Frank
- Lambert Smith Hampton
- P3 Property Consultants
- WHR Property Consultants
The consensus view of the forum is that the Manchester office market will remain stable, with "at-average take-up" during 2010.
The forum said new build will fall to its lowest level for over ten years and terms upon that office class will harden in favour of the landlord.
The forum said refurbished space will fare less well with a larger number of buildings competing in the market and terms remaining softer in this class.
South Manchester will see terms start to harden, particularly as larger units become increasingly rare. Other markets will remain more subdued, with Salford Quays predicted to be an improving market in 2011 as the BBC moves into Peel's Media City UK scheme.
The full breakdown of the Q1 take-up figures is as follows:
- Manchester city centre – 191,598 sq ft
- South Manchester – 170,256 sq ft
- Trafford – 23,290 sq ft
- Salford Quays – 56,719 sq ft
- North and east Manchester – 58,476 sq ft
- Warrington – 23,734
- Cheshire – 9,780 sq ft