Savills: Manchester market running at two speeds

Demand remains strong for the larger floorplates but there is a distinct lack of interest from occupiers in smaller floorplates of under 10,000 sq ft, according to a report by Savills.

James Evans, office agency director at Savills, said: "Office take-up in Manchester has significantly increased from 2009 levels. However, it has been mainly focussed on the larger floorplates resulting in a noticeable divide in the market and fierce competition between landlords for smaller enquiries.

"This is set to continue in the short-term although with no new completions set for 2010, looking forward we expect that those occupiers seeking to relocate will need to compromise on some of their criteria, the main one most likely being the ability to relocate to one floorplate. This should provide some welcome light at the end of the tunnel for landlords of smaller properties."

The Manchester office take-up figure for H1.10 is 318,004 sq ft, which is 37% up on the same period in 2009. Around one third of this space was Grade A with the professional sector dominating demand, accounting for 24% of the take-up. Savills predicts that the end of year take-up figure for 2010 will be in excess of 1m sq ft, although this figure will include the proposed Co-operative Group commitment to 328,000 sq ft within its new development.

Evans said the only larger Grade A space currently available is at Piccadilly Place, although this is likely to change when Credit Suisse places up to 180,000 sq ft back onto the market at 3 Hardman Square following the collapse of tenant Halliwells.

Headline rents for offices in Manchester have remained fairly resilient according to Savills and currently stand at £28.50/sq ft.