Is There 'Insatiable' Demand For Flexible Workspace In Manchester?
The firm said that deals by just two coworking operators account for 35% of take-up in the second quarter, contributing to a leap of 65% beyond the quarterly average take-up. Avison Young recorded 491K SF of deals in the central Manchester market during Q2.
In the key transaction of the quarter, Spaces agreed the largest flexible workspace deal in the UK outside of London, taking 122K SF at 125 Deansgate at a headline rent of £35/SF. WeWork secured its fourth location in Manchester taking 51K SF at Hyphen.
Avison Young Managing Director for UK Regions Chris Cheap said more than half a dozen other coworking operators are actively looking for substantial amounts of space.
“Flexible workspace operators report an almost insatiable appetite for their offer in Manchester from a broad range of businesses and this is fuelling continued growth,” Cheap said. “There is over 1.6M SF of new office space currently under construction across the city but with a high percentage of this already pre-committed, continued strong demand levels and landlords creating their own flexible or managed offers means the pipeline is not perhaps as strong as it first looks."
The Manchester Office Agents Forum said total first half take-up was 805K SF in the city centre, an increase on the 757K SF reported in H1 2018.
H1 2019 take-up in Old Trafford and Salford Quays was 122K SF, up by just 3% on the same period last year.
South Manchester’s H1 take-up was 277K SF, a 23% drop on the same period last year.
Total Manchester office take-up in the first half of 2019 was therefore 1.2M SF.
The data comes as landlords urgently reconfigure floorspace to satisfy the coworking vibe and the apparently "insatiable" demand. In the latest phase of a £50M programme, Bruntwood Works is refurbishing 111 Piccadilly to add a café lounge, and exhibition and event space on the ground floor.
A green entrance is being designed and installed by ANS, and a garden is being created outside the reception with trees planted in partnership with City of Trees.
Workspace will start on site in August with a seven month fit-out project planned to bring the refurbishment to completion. The team will work closely with architect 3D Reid which will manage the project and coordinate site activity.
"Our plans for 111 Piccadilly are to create an incredible space with community and collaboration at its heart," Bruntwood Works Regional Director Andrew Cooke said. "Investment in cutting-edge technology including air quality and heat sensors will help to create one of Manchester’s smartest workspaces.”