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No Turkeys This Christmas: Is Manchester's Office Market Getting It Right This Time?

Every Manchester office development cycle brings its fair share of turkeys. Columns in the wrong places, floors too small, location wrong, rent too high, facade too ugly, there's always an office block that lets slowly, painfully and last.

But this time has Manchester escaped the curse of the bad boomtime office block?

As the year grinds to a close, and a handful of big deals prepare to land, Bisnow went on a turkey hunt.

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Quantity does not equal quality, and each of the four waves of speculative development in Manchester over the last 30 years has brought with it a small crop of dismal failures. Poor specification, or the wrong specification, or the wrong location, or wrong design, or all four in a hellish combination.

As Manchester digests the 1.5M SF of new floorspace under construction in half a dozen schemes, it may be time to wonder which of today’s Manchester office schemes are destined to be the turkey.

According to Mace there is still plenty of so-so quality workspace on the U.K. marketplace.

A report by its facilities management arm Mace Macro reveals the hidden cost of poorly designed workplaces. Across the whole of the U.K. the average number of hours lost to unproductive workplaces is 2.4 hours a week. Using Office of National Statistics value of time data this translates to a cost of £4B in lost output every year to the U.K. economy.

“There’s been lots of talk recently about Manchester’s commercial property boom which is best highlighted by the unprecedented number of cranes across the skyline," Mace Northern Director Colin Harvey said. "While this boom is great for the city and the Northern Powerhouse economy, what these cranes can’t tell us at a glance is how much consideration has been given to retrofitting older properties, as well as ensuring our changing ways of working and future technological needs are addressed.

“Our latest report shows that poorly designed office environments can have a seriously detrimental effect on workers, impacting on their general well-being, which in turn affects the overall productivity and performance of a business."

According to Lambert Smith Hampton Director Josh Levy the rapid pace of thinking of workspace has left some developments a little behind the curve.

“Manchester’s new office buildings are BCO specification compliant, or aspire to be, which suggests they are all fit for purpose today, although there has to be a question mark over whether they will be in 15-20 years time," he said. "That’s no problem so long as they have the right mechanical and electrical systems, and physical configuration, to allow for flexibility.”

Levy points to Ask’s Embankment development as among those that has moved with the fast-moving market. “No 1 Embankment was quite vanilla, and now look, the latest buildings there are giving back so much more to the occupiers,” Levy says.

Yet other blocks now under construction, whilst meeting the highest specifications leave Levy thinking they may have missed a trick. “You can always tell from the way they handle the ground floor,” Levy said. “Double height, traditional reception area, it all feels like no more than a point of access of a kind typical for buildings created in the 2007-2010 building wave.”

These chilly corporate entrances seem designed to impose distance (“do you know who I am?”) on potential visitors when, according to Levy, a more freestyle welcoming feel is more the vibe in 2018.

“I don’t want to be harsh about some buildings, the ones I’m thinking of are striking. But the market has changed.

“My concern is that there are buildings being delivered now without thought to some of the physical issues, thinking more about lettable square feet and squeezing in as much as possible, when that isn’t what the market wants," Levy said. "Getting 90% gross-to-net floorspace may mean you end up with a core too small to be flexible, and a reception area that won’t function.”

This handful of disappointing buildings is a missed opportunity, Levy suggests, but not a crop of turkeys. “The volume of pre-lets in the Manchester market suggests developers are getting it broadly right,” he said.

 

They Take A Lot Of Stuffing

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Landmark, middle of image, with St Peter's Square behind and part of Oxford Circus in front

So, a turkey-free Christmas for the Manchester office market? JLL Office Agency Director Chris Mulcahy is confident the city’s office market is getting it mostly right. But only mostly. He worries that developers have not yet fully embraced the idea that office buildings in 2019 will be less like workplaces, and more like hotels, and that they need to provide the space and amenities to make that possible.

“Developers are working hard to create something that produces the best user experience, and the most efficiency. That’s what I’m seeing at schemes like 2 New Bailey where every floor has two balconies, and by balconies I mean useable balconies, we’ve got communal roof gardens, floorplates with nice regular easy-to-use shapes. Developers are putting a lot into the user experience,” Mulcahy said.

Even refurbishments, typically the area in which corners are cut, are going out of their way to produce quality floorspace. “Yes of course some refurbishments are more compromised than others, but they are creating interesting spaces,” he said.

“Those that succeed will be more like mini-hotels than the kind of office blocks we are used to. We’ll see proper concierge services, not just reception desks, we’ll have wellness suites, coworking areas, and developers must reflect far more on the hospitality role of their floorspace. And they are trying, I think Bruntwood are trying very hard, and that is where the focus should lie. We are not there yet, but the Manchester office market has started a journey.”

“Every building boom produces some turkeys. But so far this phase of building looks turkey free.”

You get the same mood that all is more or less well, albeit with an added seasoning of if-it-isn’t-somebody-will-pay, from GVA Regional Director Chris Cheap.

“There are buildings that are better designed than others, and the clamour of demand for central Manchester office space may have covered over the design flaws. So maybe we’ll miss out on turkeys this cycle,” Cheap said.

“But that isn’t necessarily a good thing in the sense that I don’t think the surge in demand for office space should be a get-out-of-jail card for people who have not employed the right architects, or build in the right place to the right specification, and come the inevitable market correction those developers who have skimped run the risk of being found out,” he said.

Like Levy, Cheap agrees that the way developers and designers approach the ground floor is a tell-tale guide to whether the building has fully absorbed today’s demanding office market needs.

“When we were working on 1 St Peter’s Square we initially though this would be grand and corporate, that kind of entrance, the kind you could drop into London or New York. But things have evolved. Today you see suits and skinny jeans mixing on the ground floor, something that would have caused angst a few years ago, but now it doesn’t. And that kind of mix is the future.”

Cheap’s conclusion is that buildings that do not embrace this, and who stick to the old frosty corporate style, will not prosper.

Don't Forget The Brussels Sprouts

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Circle Square, Manchester, under construction today

Some of the discussion about Manchester’s new-build and refurbished office supply sounds a little like conversation round the Christmas dinner table. Bisnow has been told, solemnly, that nobody really likes turkey and that, nonetheless, some people insist on providing it. Love-them-or-hate-them designs, now replacing the blander post-Millennium style of office building, also produce mixed reactions: these buildings are the brussels sprouts of the Manchester office scene. In both cases, the problem is that the property market is not moving quite as fast as the workplace wellness agenda.

“We’re seeing buildings being completed now that were designed a while ago. And they are not bad designs, but we’re in a period of change. The well-being agenda is so much more important than it was only a year or two ago, to the extent that you now see human resource managers coming on property viewings,” Falconer Chester Hall Architect Dave George said.

Town Centre Securities Associate Director Alistair Smith agrees. "The flight to quality has never been more crucial and occupier expectations are high right now, as the ways in which we work are changing. Accreditations such as BREEAM have been able to encourage a careful and considerate approach to sustainable development but for me the WELL standard is just as important now to ensure we create healthy buildings that are engaging and enjoyable to be in,” he said.

The last word should probably go CBRE Managing Director John Ogden who, like Santa Claus, thinks he knows who has been naughty, and who has been nice.

“The office schemes in the development pipeline certainly don’t suggest to me that they are ill thought out, in fact quite the opposite, and Circle Square, Embankment, 11 York St, New Bailey, 125 Deansgate are all well conceived and well specified,” Ogden said.

So no turkeys this Christmas in the Manchester office market? Yum yum.