Market snapshot

Office Market Pulse Manchester Q1 2013

Findings from our latest Manchester Office Market Pulse highlight an upturn in demand for large office requirements, following Travel Jigsaw's acquisition of 60,000 sq ft at Sunlight House - the largest office letting since 2011.

Download a PDF of our latest Manchester Office Market Pulse, or read and sign up to receive Office Market Pulses from other UK centres.

In this issue:

Q1 sees upturn in demand for large office requirements

Q1 city centre office take-up remained in line with the previous quarter, totaling 272,107 sq ft (Q4 2012: 275,000 sq ft). However, the quality of office space occupied across Manchester has fallen, with grade C comprising more than half the total take-up.

The out of town office market also remained steady, with Q1 take-up totaling 203,244 sq ft (Q4 2012: 202,630 sq ft).

Although overall demand has fallen back, Q1 saw an upturn in larger agent-led lettings and enquiries between 30-50,000 sq ft, both within the city centre and out of town markets. Recent deals include 60,000 sq ft at Sunlight House to Travel Jigsaw (the largest office letting since 2011) and 22,000 sq ft at 3 Hardman Square to World Pay.

For a detailed breakdown of Q1 2013 Manchester office take-up by grade, please click here or on Chart 1 to the left of this article.

Key Manchester office transactions Q1 2013

Property  Size Landlord(s)  Tenant / Purchaser 
Sunlight House 63,096 sq ft Warner

Travel Jigsaw

Park Square, Cheadle Heath 45,000 sq ft Orbit Jacobs
No1 Archway 40,496 sq ft Laing O’Rouke UK Fast
3 Hardman Square 22,000 sq ft Credit Suisse World Pay

Source: Lambert Smith Hampton

Cobbetts’ demise boosts Manchester city centre grade A office availability

City centre grade A availability increased to 1.56m sq ft in Q1 2013, following the administration of law firm Cobbetts’.

Out of town, there is a distinct lack of readily available floorspace to satisfy requirements from larger occupiers, following several recent deals. These include UK Fast’s purchase of No1 Archway (circa 40,000 sq ft) and Balfour Beattie’s sub-lease of 37,000 sq ft at Lakeside 5000, Cheadle Royal from Nike. 

On a more positive note, the first speculative scheme in Salford Quays since the downturn is set to get underway, with the 210,000 sq ft second phase of Carlyle Group’s Soapworks development following a £6m grant from the North West Evergreen Fund.

For a breakdown of Q1 2013 Manchester office supply by grade, please click here or on Chart 2 to the left of this article.

Manchester office rents remain unchanged

Headline rents for grade A office space across Manchester city centre remain unchanged at £30.00 per sq ft, and £19.00 per sq ft for out of town business park accommodation.

Prime incentives remain at 18 months for a five year term certain.

For a breakdown of Q1 2013 Manchester office rental values, please click here or on Chart 3 to the left of this article.

Coop HQ sale dominates Q1 office investment activity

Manchester’s office investment volume totalled £142.5m in Q1 2013, which is significantly higher than the £44.88m recorded in Q1 2012. 

Activity was dominated by one single transaction, namely RREEF Real Estate’s acquisition of a 51% share in the Co-operative Group's new headquarters at One Angel Square for £142m.

We expect investment levels in Manchester to remain high through 2013 as interest in the major regional cities increases with the London market becoming over-priced for many Investors.

To view our latest UK Investment Transactions (UKIT) report, please click here.

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