No8 First Street

MOAF: Manchester H1 take-up tops 750,000 sq ft

Office take-up in Manchester city centre reached 327,000 sq ft in the second quarter of 2018, taking the total for the year’s first half to 770,000 sq ft, according to Manchester Office Agents Forum.

Both figures are significantly higher than the same periods in 2017, when take up totalled 283,000 sq ft in Q2 and 487,000 sq ft in H1, MOAF said. Seventy six central office deals were completed in the period, the largest being the 54,000 sq ft finally agreed with WSP at Ask’s No8 First Street.

Other stand-out deals included 40,000 sq ft let to Handelsbanken at AEW’s 101 Barbirolli Square and 34,500 sq ft at Epsilon Real Estate Partners’ Aeroworks, taken by travel company On The Beach.

Andrew Cooke, associate in the office agency team at Savills’ Manchester office, said: “After the best first quarter on record, office take up in Manchester city centre continued robustly in Q2. There remain numerous large deals in the pipeline for the second half of this year, meaning Manchester looks set for a very strong 2018 performance.”

Over the last five years, the city centre market has typically reached between 1.2m sq ft and 1.4m sq ft for the full year.

Outside of the city centre, the total office take up for Salford Quays and Old Trafford in Q2 was 52,000 sq ft, bringing the H1 2018 total to 121,500 sq ft – a 30% year-on-year increase. The largest deal in Q2 was at Centenary House, where Regus acquired 22,000 sq ft.

In the South Manchester market, 216,000 sq ft was taken, bringing the H1 total to 385,000 sq ft, a 16% increase on the same period in 2017. The largest deal was the sale of Lakeside 3400 at Cheadle Royal Business Park to Pure Offices.

Matt Pickersgill, senior surveyor at Lambert Smith Hampton, said: “The strong Q2 figures for all of the out of town office markets have driven very positive results for the first half of 2018.  With a number of medium to large requirements still not satisfied, we should continue to see strong take up figures moving into the second half of 2018.”

At the larger end of the live requirements in that market is The Hut Group, which has taken around 51,000 sq ft at Manchester Airport already this year, and is believed to be seeking up to 250,000 sq ft. Other tech-related occupiers are also in the market for large-scale campus-style accommodation, agents say.

In the central market, deals that could land in Q3 include the whole of the 90,000 sq ft Hanover in the NOMA estate going to Amazon and WeWork in a flexible arrangement between the two parties – the co-working specialist is seeking a third Manchester space to join No. 1 Spinningfields and One St Peter’s Square.

Barclays has a requirement for a campus of up to 600,000 sq ft, for which U+I’s Mayfield is a contender, along with Airport City North. Although the project has been put on hold this year, the completion of a deal this week for a Scottish hub at Drum Property’s Buchanan Wharf could trigger the Manchester project’s resumption.

MOAF members include Avison Young, BE Group, CBRE, Colliers International, Canning O’Neill, Cushman & Wakefield, Edwards & Co, GVA, Hallams Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI Property, Savills, Sixteen Real Estate, and TSG Property Consultants.

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