The new build market in Manchester City Centre was outperformed by the refurbished/historic grade A and grade B+ market for the first time in recent years.
Q1 figures compiled by the Manchester Office Agent Forum (MOAF) confirm that 70,000 sq ft of grade B+ accommodation was let in comparison with a single 6,820 sq ft grade A transaction at Chancery Place to QBE.
Headline rents at £30.00 sq ft
The lack of supply has also contributed to Headline Rents returning to £30.00 sq ft.
David Thwaites, Head of our Office Agency team in Manchester, commented: “The lack of choice within the City Centre grade A market, has resulted in a willingness from occupiers to relocate to well located, high quality slightly older refurbished buildings.”
Total grade A supply in city centre at 616,000 sq ft
Grade A accommodation currently available within the City Centre equates to 616,000 sq ft. However, nearly 60% of this total is accounted for within two schemes; Piccadilly Place and 3 Hardman Square. The majority of the remaining space is comprised, and has been vacant for a number of years.
Little choice for occupiers
Occupiers not wanting to be in Piccadilly or with a requirement of 20,000 sq ft or more, have very little choice but to consider substantially refurbished grade B+ stock.
David added: “There are a number of sizeable requirements currently within the market, which should lead to an increase in take-up for 2012. It continues to be buildings such as Bruntwood’s City Tower and the Riverside scheme, which provide the necessary quality space for the majority of occupiers.
Landlords prepared to upgrade and refurbish buildings will prosper
David concluded: “Over the next 3 years, landlords prepared to invest in their buildings by providing refurbished offices, common area upgrades and flexible floor configurations, will benefit from minimal voids and rental growth.”