Savills: Manchester office shortfall could hit 3m sq ft
A ‘Future of Manchester’ report published by real estate advisor Savills has said that an additional 3m sq ft of offices and 55,000 homes need to be built in Manchester over the next decade to avoid a deficit.
Savills predicted that the number of office workers in Greater Manchester is set to grow by 36,000 by 2025 as more companies look to ‘north-shore’ or grow their existing presence in the city. To meet this demand, an additional 4m sq ft sq ft of office space will be required in the city within the next 10 years. Over the next three years around 1m sq ft of offices are set to be delivered, and a further 500,000 sq ft of refurbished space in existing buildings is planned, but this still leaves a shortfall of around 3m sq ft between supply and demand.
Savills forecasted that most new commercial space is likely to be delivered around the existing cores of Spinningfields and Piccadilly, but with prime office rents in these locations predicted to rise from £33/sq ft to £37/sq ft by 2019, existing occupiers may begin to find these areas unaffordable.
MediaCityUK and Salford Quays, the Salford/Irwell corridor, Southern Gateway and South Manchester’s business parks all have the potential to deliver more affordable accommodation for cost-conscious occupiers, according to the research, but with current levels of availability there is likely to be a shortage of mid-priced refurbished office space suitable for TMT and SME companies, which will not be filled by the major developments in the pipeline.
At the same time, the resident population of Manchester is forecast to rise by 65,500 over the next ten years, requiring around 9,650 new homes a year. Current delivery is falling some 5,100 below this need, according to the report, which means there will be a shortfall of 51,000 homes in the next decade in Greater Manchester.
The resulting imbalance between supply and demand against a backdrop of an improving economy and the city’s low average house prices, at £111,567 compared to the England & Wales average of £186,553, indicates real growth potential.
James Evans, director of office agency in Savills’ Manchester office, said: “Manchester continues to boom with relatively affordable living and commercial space stimulating continued demand for offices from indigenous, north-shoring and inward-investing businesses. While this is good news for landlords, investors and developers, if we fail to keep pace with demand the city’s ongoing growth prospects could be jeopardised, with businesses relocating or looking elsewhere if they can’t find space that fits their requirements.
“The planning process needs to carefully balance the need for more offices against the equally pressing requirement to deliver more homes, as these new employees will need somewhere to live as well as work.”
To read the full Savills ‘Future of Manchester December 2015’ report click here
They would say that, wouldn’t they.
By Arthur Dent
Manchester is almost growing too fast. Hopefully we will see more commercial space developed in the next decade to keep up with demand or our cheaper rival cities may take some of this up. This is obviously the place where companies want to be
By Yarrum
Why would Manchester be so against ‘cheaper rival cities’ providing office space for companies moving to the north? Does Manchester really think it needs to monopolize the whole market? Come on surely a confident city can be relaxed about other cities doing well too? Or was the Council leader revealing something when he said ‘Manchester needs to build as fast as it can’. Is that to try and stop ‘other cities’ from progressing…….
By Paul Blackburn (Chester)
No major city can afford to pass up inward investment, and must ensure it can accommodate those wishing to contribute to future prosperity. Stagnate and die.
By Midway
So Midway thinks Manchester’s at risk of dying if Liverpool grabs a few of the office blocks?
By Laughable
This great City of ours is being ruined by lunatic traffic management which causes more and more companies to not bother being here . The bus and bike centric policy lunacy is reaping its own reward.
By Roberto
I’m not sure that’s what s/he was saying
By Uni
“or our cheaper rival cities may take some of this up”.
What a disgraceful comment. Why shouldn’t other cities also have jobs? Not even allowed to have “some”, it seems.
This is the ugly truth of the Manchester approach. The rest of the north can be plunged into debt, disrepair and mass unemployment, who in Manchester would give a hoot about that?
Excellent at throwing stones at others about “parochialism”, not so good at practicising what they preach?
Viewing people in other cities with such hostility, desperate to prevent those people from getting jobs in their own cities, is obviously not in the national interest. Manchester has become a problem, in my opinion.
By Mike
Those darn transport proposals that take cars off the road, what do they think they’re doing?….
By Roe Digger
Liverpool, Leeds, Warrington, Wigan, Blackpool, Bolton, St Helens, Crewe, Chester … your boys took one hell of a beating.
Now bow down before the behemoth that is the Capital of the North.
By Cloth Cap
1 m sq ft due soon in addition to numerous unlet floors within up and built buildings.This requires a lot of new inward investment.Not convinced.
By Real deal
Manchester seems to be pulling away from the rest of the North and this is creating an arrogance in Albert Square.We do not want to replicate the South East where only London has any real relevance and the rest of that region need to traipse into it every day for work.There is already a harshness about Manchester now which did not have 20 years ago.I lost track last week of how many people walked into me and didn’t apologise.That rarely happened in the the past.The facilities too are inadequate for the population swell.I stood on the Piccadilly gardens Metrolink platform the other day and it was dangerously overcrowded. If the boroughs around become part of the city in the next decades,which will inevitably happen,the population will be pushing 3 million.
By Elephant
The beauty of the North is that it has more than one centre. Manchester will become unbearable if it gets any more crowded. Manchester needs no more bolstering and the Government should pay more heed to the rest of the North as a multi-centred North will be much more sustainable and will create prosperity for more people and contribute more to the national economy in the long term.
By Between Liverpool & Chester
Seems to be a lot of ill informed comments on here. Inevitably Greater Manchester’s population will top 3million at some point. But there are cities in China and elsewhere that have populations of 25 – 30 million people, so its rubbish to say Manchester is overcrowded. Manchester needs more people not less. The fact is you need dense urban populated areas which are the driver for prosperity. Other cities and towns need to find their own USP and get on with it and stop moaning about Manchester. I dont think anybody can seriously say the city centre is worse than it was 20 years ago.
By NQ2
No it’s not worse. The point is that the North is not just Manchester!
By LL11
I didn’t say the city centre isn’t better.I referred to attitudes,which are different now.The immediacy which was such a nice part of Manchester is going.People are frustrated due to overcrowded streets and transport.The central Metrolink platforms are not fit for purpose.Did anyone think that when the lines were extended to Rochdale,Oldham and Tameside,that those boroughs have a combined population of 3 quarters of a million people?
By Elephant
Manchester is more and more competing on a national, European and international basis and to do so successfully must go all out to attract business and investment. That also is the route to being able to address the city’s many social issues. It’s not a case of trying to deprive other northern areas because any positive perceptions of the North can only be of benefit to all. But it’s up to other cities and parts of the North to compete also, and if that is by offering niche opportunities or more competitive terms than Manchester, then good luck to them. They won’t succeed by Manchester being less ambitious.
By Observer
The comment from Observer is just what the London press say about every other British city.’we can’t make Britain richer by not investing in London’This is exactly what I mean,Manchester is becoming arrogant and superior.Let everywhere else rot in the North whilst Manchester booms? Is that what we want? This is why everyone hates London.
By Elephant