It's Down But It Doesn't Matter: Big Shrugs As Manchester Office Take Up Takes A Tiny Dip
Today's announcement from the Manchester Office Agents Forum that overall Manchester office market take-up has dipped by 1.8% from 2.17M SF in 2016 to 2.13M in 2017 has not set anyone's alarm bells ringing. Instead it is all about shrugs in the U.K.'s second largest office market.
The forum recorded city core office take-up in 2017 of 1.21M SF, well above the 10-year average but a shade down on the 1.31M SF reported in 2016. Total transaction volumes were up too: 271 deals, as oppose 81 in 2016.
Salford Quays and Trafford's office market took a hit with MOAF recording take-up at 285K SF in 2017, down on 315K SF in 2016. The stand-out transaction saw Kellogg’s taking 48K SF at Orange, Media City.
However, the dip in Salford Quays was more than balanced by a surge in South Manchester, where total take up was 641K SF, up 17% from 547K SF in 2016. This too is above the South Manchester 10-year average after lettings to Laing O’Rourke, Biz Space and Assetz Capital ensured that it was a strong finish to the year.
The shrugs are because most agents believe the city would have recorded much higher take-up if there had been more space to let. Strong demand for prime office accommodation has left the market with a record low supply of Grade A office space.
The forum said there is 160K SF of Grade A accommodation on the market, at 101 Embankment, No. 1 Spinningfields, 3 Hardman Square, 40 Spring Gardens and 2 St Peter’s Square. Grade A space under construction totals 706K SF, but most of it is not due for completion until 2019. Its conclusion is that the scope for pre-lets and refurbishments has never been better.
Speculative schemes under construction include Landmark (180K SF), 125 Deansgate (126K SF), Hanover at NOMA (90K SF), Circle Square (230K SF) and 11 York Street (80K SF).
“The strong end to 2017 reinforces the sentiment of Manchester being the most active office market outside of London," Colliers International Associate Director Scott Shufflebottom said. "The dust has yet to settle on the decision for the U.K. to leave the European Union but it is the collective view of the MOAF that there will be no long-term negative impact on the city centre office market."
Formed in 2009, the forum's 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