Market snapshot

Office Market Pulse Manchester Q3 2017

A number of big ticket deals landing this quarter has lead to a stellar take-up total. City centre take-up for Q3 2017 is an impressive 69% increase on Q3 2016. With 146,646 sq ft of new grade A space transacting and equating to 33% of the total Q3 take-up, grade A supply continues to rapidly diminish.

You can download a PDF version of this here Office Pulse Manchester Q3 2017

In this issue:

A stellar Q3 for Manchester city centre

City centre office take-up for Q3 2017 reached 447,809 sq ft across 78 transactions, a 69% increase on 2016’s Q3 performance. This brings the total so far in 2017 to 938,645 sq ft a 6.4% increase on the same period in 2016.

The biggest Q3 transactions were the Department for Working Pensions taking 77,449 sq ft at Two St Peter’s Square. Law firm Clyde & Co took 69,000 sq ft at Manchester Royal Exchange and coworking giant ‘We Work’ took 44,000 sq ft at One St Peters Square.

Small scale requirements (below 5,000 sq ft) accounted for 82% of the 60 transactions in Q3 indicating a continued high demand from the SME sector
South Manchester’s Q3 total was 140,531 sq ft, a 23% increase on the same quarter during 2016. 

The combined Salford Quays and Old Trafford Q3 take-up was 112,410 sq ft, a 25% increase on the same period in 2016. 

The largest Q3 out of town letting was Kelloggs taking 48,120 sq ft at the Orange Building in Peels Media City.

New build grade A supply diminishing

146,646 sq ft of grade A new build stock transacted during Q3, equating to 33% of Q3’s take-up, reflecting the ongoing demand for new prime office stock. Less than 12 months grade A supply remains and although 784,000 sq ft is under construction, 250,000 sq ft of this is already pre-let.

With only No.8 First Street to complete in Q4 this year - with only 140,000 sq ft left available - and no new build completions due in 2018, prime market rents will inevitably rise and are expected to reach £40.00psf by 2020.

As grade A supply falls and remains limited, demand for grade B/A refurbishments will also increase resulting in upward pressures on prime secondary rents, currently reaching £27.00psf.

The most active rental bracket in Q3, as with Q1, was £20.01-£30.00 psf making up 44.8% all the 34 rental transactions.

Key occupational transactions, Q3 2017


Size (sq ft) 

Landlord(s)/ vendor


1-5 Two St Peter's Square 77,449 Deutsche Asset Management DWP
Manchester Royal Exchange 69,000 Hines Clyde & Co
Orange, Media City 48,120 Peel Kelloggs
One St Peter's Square 44,000 Deka We Work
Citygate 31,193 Hermes Parlimentary Health Service Ombudsman 

Source: Lambert Smith Hampton 

Achieved rents steadily on the rise within the city centre

The highest rent achieved within the city centre this quarter was at Vantage Point in Spinningfields at £34.00, although this was only over 3,814 sq ft. Two St Peters Square again achieved £33.00psf, which was also the biggest deal of the year so far at 77,449 sq ft. 

Due to the limited supply of grade A space, incentive packages remain low with on average a 9-12 month rent-free package being offered for a five-year lease.

The Orange Building in MediaCityUK achieved the highest out of town rent in Q3 at £24 psf, reflecting the continued strength for grade A office space within Media City especially.

Investment transactions Q3

Greater Manchester office investment activity totaled £319m in Q3 2017. This was an increase of £239m on the previous quarter and a 58% increase on Q2 2016. 

The two biggest deals were both in Salford. M&G purchased 101 Embankment for £105m, and Soapworks was bought by Greater Manchester Property Venture Fund for £60m.

Activity in Manchester city centre was strong with nine office transactions, accounting for over £121m.

Key deals in the city included Aviva Investors’s purchase of 55 Spring Gardens, and AEW’s purchase of 100 Barbirolli Square.

These figures demonstrate the continued investor appetite for office assets in Greater Manchester where there is a positive occupier market.

Key investment transactions, Q3 2017


Value (£m) 



Embankment, 101 105  M&G Real Estate  Ask Developments
Soapworks, Colgate Lane 60 Greater Mcr Property Venture Fund  Carlyle Group
Barbirolli Square, 100 40.9 AEW Europe (EVI) Moorfield Group Ltd
Trident Office Park 25 Longmead Capital LLp Property Alliance Group

Source: Lambert Smith Hampton 

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