Market snapshot

Office Market Pulse Manchester Q3 2015

The Manchester office market had a strong third quarter with take-up totaling 656,706 sq ft, significantly higher than the 402,909 sq ft recorded in Q3 2014. The city centre market was particularly active with a notable rise in demand for prime grade A stock - up 166% on the previous quarter. Out-of-town, Syngenta’s acquisition of 32,330 sq ft at The Towers Didsbury was the standout deal and a clear indication of the region’s growing appeal to international businesses.

There are currently six new build schemes under construction in the city centre, amounting to over one million sq ft. However, close to 40% of this is already committed via pre-lets, with XYZ, Spinningfields now fully let 12 months prior to its scheduled completion. Despite the significant pipeline, the continued imbalance of demand over supply of prime and good quality stock will advance the need for further development.

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In this issue:

City centre take-up on target to reach 1.4m sq ft

Take-up in the Manchester city centre office market totalled 373,477 sq ft in Q3 2015. While only a marginal increase in activity on the previous quarter, it was significantly higher than Q3 2014. The year-to-date total currently stands at 1,052,154 sq ft and is predicted to reach a record 1.4m sq ft by the end of 2015.

The level of active requirements remained healthy during Q3, with a notable rise in demand for prime grade A stock; up 166% on the previous quarter and accounting for over 55% of total take-up.

‘Northshoring’ is becoming more evident as occupiers seek to reduce occupancy costs; recently demonstrated by Freshfields’ commitment to acquire 80,000 sq ft at One New Bailey. 

The out-of-town market continued to perform well. Notable transactions included Syngenta’s inward investment of 32,330 sq ft at The Towers, Didsbury and Avecto’s acquisition of 29,000 sq ft at Trident.

Occupier demand provides scope for new development and refurbishment activity

As demand increases, the level of grade A supply continues to drop; falling by 14% on the previous quarter.

A number of new build schemes in the city centre – One New Bailey, One Spinningfields and Embankment – will deliver much needed grade A stock, however completion is not until between 2016-2018. 

XYZ - the most successful building of the current ‘pre let era’ is now fully let and advancing the need for further development to enter the pipeline.
The supply of grade B floor plates has diminished significantly; nevertheless, developer confidence has increased, with landlords now responding to the gap in the market. 

With a lack of new build developments in the out-of-town markets, supply has continued to fall across all grades. Stable demand is providing investors with rental growth opportunities.

Key occupational transactions, Q3 2015


Size (sq ft) 

Landlord(s)/ vendor


Allied London
NCC Group
8 First Street
51,200 Ask/Patrizia
32,000 Allied London
Arndale Tower
32,619 M&G
 40 Spring Gardens 12,032 Climate Change Aldermore

Source: Lambert Smith Hampton 

Rental growth expected to continue

Grade A headline rents in the city centre remain unchanged at £32.00 per sq ft. However Chancery Place has announced a headline rent of £34 per sq ft for Q4, setting the benchmark for further transactions before the end of 2015.

Incentives are hardening with rent free packages falling broadly back in line with their pre-recession level; reflecting a growing lack of choice in particular locations.

New build rents in the out–of-town markets have increased to £22.50 per sq ft. 

The imbalance of demand over supply, and scarcity of prime and good quality existing stock will push headlines rents in the city centre and prime out of town markets up by the end of the year.

Office investment volumes up over 135% on the previous quarter

The Manchester office investment market witnessed a bumper quarter in Q3 2015, with investment volumes totalling £222m; significantly higher than the £85m recorded in Q2 2015.

Total activity for the quarter was dominated by Deutsche Asset & Wealth’s forward funding of 2 St Peter’s Square for £100m, which highlights the continued appetite for prime city centre stock.

Other significant deals included 101 Barbirolli Square (£32m), 201 Deansgate (£26m) and 97 Talbot Road (£17m). 

We expect the strong investment levels in Manchester to continue throughout the remainder of the year, as investors - particularly UK Institutions - continue to seek better value in the regions.

View the latest edition of our UK Investment Transactions (UKIT) report.

Key investment transactions, Q3 2015


Value (£m) 



2 St Peters Square
100 Deutsche Asset & Wealth
Mosley Street Ventures
101 Barbirolli Square 32 A&W Europe Aberdeen Asset Management
201 Deansgate 26 Redefine International Aegon UK Property Fund
Anchorage, Salford Quays  26  H.I.G Capital  Schreiber Holdings Ltd 

Source: Lambert Smith Hampton 

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