Despite a lack of city centre new build, Manchester continues to outperform other cities, according to our latest Greater Manchester Office Market 2011 report.
City Centre take-up down 50%
The first three quarters of 2011 witnessed a downturn in activity compared to 2010, which saw a record take-up of office space in Greater Manchester. This has mainly been due to the reduction in occupational activity within the city centre market.
Total take-up of office space for 2011 within the city centre is expected to be around 700,000 sq ft. If confirmed, it is 30% under the long-term average of 990,000 sq ft, and nearly 50% down on last year.
Outperforming Bristol and Birmingham
David Thwaites, Associate Director in our office in Manchester, said: “Although take-up for office space is likely to be less this year, Greater Manchester still outperforms other cities.
“Economic conditions have reduced occupational activity for the majority of the UK’s provincial cities in 2011. However, take-up of 868,000 sq ft at the end of Q3 demonstrates that Greater Manchester is on course to outperform its nearest competitors, Bristol (545,000 sq ft) and Birmingham (534,000 sq ft).”
South Manchester and Salford Quays take-up stable
He added: “Although 2011 take-up within the city centre is likely to be at its lowest level since 2002, South Manchester and Salford Quays have performed reasonably well. The number of transactions has remained consistent, but take-up has decreased, due to the lack of large corporate activity.”
Two years of grade A supply left in Manchester
Our report also compares grade A office supply throughout the UK’s six main provincial cities. It shows that Manchester, along with Bristol has just over two years available grade A supply. In comparison, Leeds and Edinburgh have nearly five years stock currently available.
David said: “Take-up within the city centre has in recent years exceeded that of other provincial cities. However, the current lack of grade A supply and new build development, is becoming an issue for those firms wanting to relocate or expand and grow in the city. It may also deter occupiers from outside the region from opening or setting up in the area.”
Landlords to pursue asset management strategies
David concluded: “Over the next few years, a shortage of grade A space will create opportunities for landlords of existing grade B buildings. They could pursue effective asset management strategies, and deliver sustainable efficiencies in costs and flexibility of design, increasingly being demanded by occupiers when relocating.”