Manchester continues to outperform other cities

The H1 2011 total for city centre office take-up was 304,000 sq ft, which is slightly less than the 317,000 sq ft total for the corresponding period in 2010, a reduction of 4%, said the Manchester Office Agents Forum.

Occupier activity for Manchester city centre increased in the second quarter compared with the slow start to the year witnessed during Q1 2011.

Take-up for Q2 within the city centre totalled 174,978 sq ft, an increase of 36% on the previous quarter.

The most notable transactions during the last quarter were Linder Myers' acquisition of 55 Spring Gardens (47,500 sq ft) for their own long term occupation and HL Interactive's acquisition of 9,000 sq ft at City Tower. The recent deal agreed at City Tower, which saw Aegis acquire 36,000 sq ft, will be included within the Q3 figures.

With large scale speculative development yet to be announced supply continues to decrease, particularly for quality new accommodation where less than two years' supply remains. For those landlords with high quality grade A buildings this has enabled a more selective approach to agreeing deals. This is likely to continue for the foreseeable future as grade A stock continues to be absorbed, which is likely to result in an increase in average grade A rents.

A similar increase has been experienced within the South Manchester market where take-up has increased by 38% from the previous quarter. However, the lack of sizeable transactions over 10,000 sq ft has reduced take-up by 31% from the corresponding figure in 2010, during which a number of large high profile transactions were agreed.

David Thwaites, head of office agency at Lambert Smith Hampton and spokesman for MOAF, said: "The slow start experienced early in 2011 followed an extremely strong end of year for 2010, when take-up levels were boosted by several large deals most notably by the Co-operative Group.

"It is understood that 2010 was an unprecedented year for occupational activity, which was always going to be difficult to maintain in the current climate. However, Manchester continues to outperform other competing regional centres and should benefit from several large requirements likely to be satisfied before the end of the year."