Office take-up last year totalled 1.2m sq ft across 271 transactions in the city centre, according to the Manchester Office Agents Forum, a slight dip from the 1.3m sq ft recorded in 2016, but still above the 10-year average.
Key transactions in 2017 included 55,800 sq ft to WeWork at No1 Spinningfields and 44,000 sq ft at One St Peters Square, 77,500 sq ft to DWP at 2 St Peter’s Square, and Clyde & Co taking 69,000 sq ft at the Royal Exchange.
MOAF said that strong demand for prime office accommodation has left the market with a record low supply of Grade A office space.
With only 160,000 sq ft of prime accommodation presently available across 101 Embankment, No1 Spinningfields, 3 Hardman Square, 40 Spring Gardens and 2 St Peter’s Square, this year is expected to present opportunities for landlords to deliver refurbished products to the market.
Schemes under construction include Landmark at 180,000 sq ft, 125 Deansgate at 126,000 sq ft, Hanover at 90,000 sq ft, Circle Square at 230,000 sq ft and 11 York Street at 80,000 sq ft, the majority of which will be delivered in mid-late 2019.
Scott Shufflebottom, associate director at real estate advisors Colliers International, said: “The strong end to 2017 reinforces the sentiment of Manchester being the most active office market outside of London. The dust has yet to settle on the decision for the UK to leave the European Union but it is the collective view of MOAF that there will be no long-term negative impact on the city centre office market. Due to the unrivalled quality of both the existing and proposed developments and the strong levels of demand from both indigenous and inward investing occupiers, we have full confidence that the rental market will continue to prosper.”
Salford Quays and Trafford performed strongly again with MOAF recording take-up at 285,200 sq ft in 2017. The stand-out transaction involved Kellogg’s taking 48,120 sq ft at the Orange building at MediaCityUK.
South Manchester was up 17% on 2016, with 641,000 sq ft transacted, an increase on the previous three consecutive years. In the second half of 2017, larger transactions including Laing O’Rourke, Biz Space and Assetz Capital ensured that it was a strong finish to the year.
Anthony Howcroft, partner at Hallams Property Consultants, said: “The combined office take-up for the three recorded areas of Greater Manchester totals over 2.1 million sq ft, this firmly cements the region as the leading light outside of London. Continued investment in infrastructure and the growth of Manchester Airport ensure that the whole region not just the city centre are able to share in the success and attract quality occupiers to continue the trend of growth.”
Formed in 2009, 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.