Almost 500,000 sq ft of offices were transacted in Manchester city centre in the second quarter of 2019, according to the Manchester Office Agents Forum.
Deals totalled 490,000 sq ft in Q2 2019, meaning that 805,000 sq ft was let or sold over the course of the first half of the year. This is up from 757,000 sq ft transacted in the same period in 2018.
MOAF described serviced and co-working operators as “the stand out performers” in Q2 2019, with WeWork acquiring 51,000 sq ft at Hyphen, Mosley Street, and Spaces acquiring 125 Deansgate in its entirety. At 122,000 sq ft, the deal to Spaces represents the largest transaction of the year so far.
Other significant transactions include WPP acquiring 82,000 sq ft at Enterprise City and Barclay’s expanding by 33,000 sq ft at Piccadilly Place.
The supply of Grade A office accommodation remains at a record low, which MOAF said has led to further rental growth in both the Grade A and Grade B refurbished markets. Prime rents of £36.50/sq ft have been achieved in the first half of 2019 with further rental growth expected.
Scott Shufflebottom, associate director in Colliers International’s national offices team said: “Despite uncertainty in the property market being a recurring theme since the 2016 referendum, the Manchester office market has continued to prosper and has achieved unprecedented levels of take-up and rental growth, showing great resilience and further underpinning its position as the second city. The quality of both existing and proposed developments coupled with a strong pipeline of pent up demand both from indigenous and inward investing occupiers ensures that confidence remains strong in Manchester’s office market.”
The combined regions of Old Trafford and Salford Quays saw take-up of 67,955 sq ft in the second quarter, giving a half year total of 122,300 sq ft, surpassing the 2018 H1 figures by almost 3%. The region saw a total of 59 transactions, an increase of 31% on the same period in 2018.
Significant transactions included Marks & Spencer taking 12,000 sq ft at the Alexandra, The Home Office taking 20,490 sq ft at the Soapworks and Capgemini taking 11,360 sq ft at Venus.
Richard Dinsdale, director at Edwards & Co said: “Whilst there is a diminishing supply within the Old Trafford region, predominantly due to a number of office buildings being the subject of residential redevelopment, the Salford Quays supply still remains buoyant due to the recent refurbishment schemes at the likes of Anchorage 1 & 2, Voyager & the Victoria, with the three properties alone totalling over 200,000 sq ft of newly refurbished office space. Furthermore, there’s exciting times ahead regarding the development pipeline, with Peel Media and L&G having just secured finance to develop the next phase of MediaCityUK, which is set to include up to 540,000 sq ft of offices over the next 10 years.”
South Manchester experienced a relatively positive second quarter with take up reaching 140,00 sq ft, almost the same as the first quarter, providing a first half total of 277,000 sq ft for the region. Comparatively to last year, there was a 23% reduction in space let during the first half of 2019, and 20% fewer transactions, however MOAF stressed this was due to 2018 being “a record-breaking year for South Manchester by some margin”.
Deals in the first half of 2019 include Verastar taking 61,000 sq ft at Dovecote, Smart DCC taking 33,600 sq ft at Brabazon House and Landis & Gyr taking 18,700 sq ft at Trident, the latter transactions being located at Manchester Airport.
MOAF members include: Avison Young, BE Group, CBRE, Colliers International, Canning O’Neill, Cushman & Wakefield, Edwards & Co, Hallams Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI, Savills, Sixteen Real Estate, and TSG Property Consultants.