Market snapshot

Office Market Pulse Manchester Q4 2015

The Manchester city centre office market witnessed another robust year, with take-up totalling 1,318,282 sq ft. Although a fraction below last year’s figure of 1,333,425 sq ft, it is still 31% above the five-year average of 1,003,071 sq ft; highlighting the continuing strong levels of demand. 

Activity in the final quarter fell short of predicted levels, with 263,365 sq ft transacted; however, a number of requirements that didn’t come to fruition will continue their search in 2016. The largest city centre office transaction was Addleshaw Goddard’s pre-let of 56,253 sq ft at One St Peter’s Square. Nevertheless, XYZ Building in Spinningfields and The Soapworks in Salford Quays were the stand out schemes in 2015.

Six major developments will be delivered in Greater Manchester over the next 18 months, bringing 1,502,902 sq ft of grade A office space to the market. Of this, 234,480 sq ft has been pre-committed over the course of 2015, showing that Manchester is continuing to be highly active and we expect to see a further 80,000 sq ft being pre-let to Freshfields at One New Bailey in the first quarter of 2016. 

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In this issue:

Another robust year for Manchester take-up

City centre office take-up for 2015 totalled 1,318,282 sq ft, a fraction below last year’s figure of 1,333,425 sq ft. However, it is still 31% above the 5 year average of 1,003,071 sq ft, highlighting the continuing strong levels of demand.

Activity in the final quarter of the year fell short of predicted levels at 259,632 sq ft, down 32% on the previous quarters figure. However, Hewlett Packard and Money Supermarket will continue their search in 2016, with a combined requirement of 135,000 sq ft. 

Grade A take-up within Q4 was 79,288 sq ft with the largest letting occurring at One St Peter’s Square where Addleshaw Goddard took 56,253 sq ft.

Out of town, Salford Quays performed exceptionally well with take-up reaching 582,477 sq ft, almost 12 times greater than the 2014 total. Significant lettings included BUPA taking 142,000 sq ft at Harbour City and TalkTalk taking 106,187 sq ft at Soapworks. 

In South Manchester take-up reached 553,554 sq ft remaining broadly in line with the previous year. 

The completion of three major office schemes in 2016 will bring a much needed boost to supply

We have seen a slight increase in grade A supply in Q4, however, this is reflective of Landlords taking advantage of the lack of variety in grade A supply and upgrading grade B/C buildings to cover the shortfall.

Three new build schemes are due to complete in 2016, namely XYZ Building, One New Bailey and 101 The Embankment, bringing a total of 436,302 sq ft to the market, 225,000 sq ft of which is currently pre-let.

A further three buildings are currently under construction in the city centre, 100 The Embankment, 2 St Peter’s Square and No1. Spinningfields. In total they will provide an additional 486,000 sq ft of Grade A office space to the market upon completion in 2017, 91,500 sq ft is already pre-let.

Due to a number of larger transactions taking place in the out of town markets, there is a substantial shortage of large floor plates and self-contained opportunities within the grade A sector. 

Key occupational transactions, Q4 2015


Size (sq ft) 

Landlord(s)/ vendor


One St Peter's Square
56,253 Argent/GMPVF
Addleshaw Goddard
The Hive
9,933 Kames Property Income Fund
Join the Dots
St Ann's House 8,603 Standard Life Help Your Claim
Manchester Royal Exchange
8,048 Trinistar
Hoare Lee
Chancery Place 7,786 NFU Mutual Colliers International

Source: Lambert Smith Hampton 

Incentives continue to reduce

The Colliers letting at Chancery Place brought grade A headline rents in the city centre to a record £34.00 per sq ft. 

Incentives are continuing to harden with rent free packages falling broadly back in line with their pre-recession level due to the continuing lack of choice in particular locations.

New build rents in the out–of-town markets peaked at £24.50 per sq ft, achieved at Orange Tower, MediaCityUK.  

The increase in rents is expected to slow as a number of new build developments are delivered to the market.

Bumper year for Manchester office Investment activity

Investment activity in the Greater Manchester office market remained buoyant this quarter, with investment volumes totaling £170m. Although down by 23% on the previous quarter, it brings total office investment for 2015 to £911.7m, falling just short of the record £1bn recorded in 2014 but more than double the total for 2013 at £414m.

Significant deals in Q4 included: 

  • Standard Life’s acquisition of 1 Marsden Street for £34m, reflecting a net initial yield of 5%
  • Aprirose REI’s purchase of 76 King Street for £16m
  • Bruntwood’s acquisition of Commercial Union House in Albert Square for £16m, reflecting a net initial yield of 5%
As investor appetite in the region continues to gather pace, we expect activity in 2016 to remain well above the recent average.

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

Key investment transactions, Q4 2015


Value (£m) 



1 Marsden Street
34 Standard Life
Ares Management LLC
76 King Street 16 Aprirose REI Aspen Assets Ltd
Commercial Union House, Albert Square 16 Bruntwood Private Investor
24 Mount Street 13 FORE Partnership Titan Investors

Source: Lambert Smith Hampton 

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Josh Levy

0161 242 7061

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Josh Levy
Director - Office Advisory

0161 242 7061

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