The city of Manchester has enjoyed a strong first half of the year, with figures showing approximately 805,000 sq ft has been transacted in 2019 thus far.
Figures revealed by the Manchester Office Agents Forum (MOAF) show that Manchester City Centre’s office market is booming with the half-year totals exceeding the 757,000 sq ft transacted in the same period last year.
MOAF’s findings also showed a successful Q2 for the city where 490,000 sq ft was transacted within the city centre during Q2 2019 alone.
Now into its tenth year, MOAF’s members include: Avison Young, BE Group, CBRE, Colliers International, Canning O’Neill, Cushman & Wakefield, Edwards & Co, Hallams Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI, Savills, Sixteen Real Estate, and TSG Property Consultants.
Scott Shufflebottom, Associate Director in Colliers International’s National Offices team said: “Despite uncertainty in the property market being a recurring theme since the 2016 referendum, the Manchester office market has continued to prosper and has achieved unprecedented levels of take-up and rental growth, showing great resilience and further underpinning its position as the second city. The quality of both existing and proposed developments coupled with a strong pipeline of pent up demand both from indigenous and inward investing occupiers ensures that confidence remains strong in Manchester’s office market.”
MOAF’s findings show that serviced and co-working operators were the stand out performers in Q2 2019 with WeWork acquiring 51,000 sq ft at Hyphen, Mosley Street and Spaces (Regus) acquiring 125 Deansgate in its entirety.
Coming in at 122,000 sq ft, the deal to Spaces represents the largest transaction of the year so far. Other significant transactions in the city include WPP acquiring 82,000 sq ft at Enterprise City and Barclay’s expanding by 33,000 sq ft at Piccadilly Place.
However, despite the positive numbers, the supply of Grade A office accommodation remains at a record low, which, in turn, has led to further rental growth in both the Grade A and Grade B refurbished markets.
The combined regions of Old Trafford and Salford Quays saw take-up of 67,955 sq ft for Q2, boasting a half year total of 122,323 sq ft, surpassing the 2018 H1 figures by almost 3%. Furthermore, activity levels were also on the rise, with the region experiencing a total of 59 transactions, which is a substantial increase of 31% on H1 2018.
Significant transactions within the region during 2019 included Marks & Spencer taking 12,012 sq ft at the Alexandra, The Home Office taking 20,490 sq ft at the Soapworks and Capgemini taking 11,364 sq ft at Venus.
Richard Dinsdale, Director at Edwards & Co said: “Whilst there is a diminishing supply within the Old Trafford region, predominantly due to a number of office buildings being the subject of residential redevelopment, the Salford Quays supply still remains buoyant due to the recent refurbishment schemes at the likes of Anchorage 1 & 2, Voyager & the Victoria, with the three properties alone totalling over 200,000 sq ft of newly refurbished office space.
“Furthermore, there’s exciting times ahead regarding the development pipeline, with Peel Media and L&G having just secured finance to develop the next phase of MediaCityUK, which is set to include up to 540,000 sq ft of offices over the next 10 years.”
South Manchester experienced a relatively positive second quarter with take-up reaching 139,198 sq ft, almost identical to Q1, providing a total H1 2019 total of 277,271 sq ft for the region.
Compared to last year, there was a 23% reduction in space let during the first half of 2019, and approximately 20% fewer transactions, however, it’s important to remember that 2018 was a record-breaking year for South Manchester by some margin.
Sizeable deals of note during the first half of 2019 include Verastar taking 61,000 sq ft at Dovecote, Smart DCC taking 33,591 sq ft at Brabazon House and Landis & Gyr taking 18,708 sq ft at Trident, the later transactions being located at Manchester Airport.
Richard Dinsdale added: “Take-up is healthy and demand remains stronger than ever within the South Manchester regions, and whilst 2019 is not set to be another record year, there are a number of significant lettings in the pipeline which will bolster the figures. We anticipate ‘the 2019 take up’ to finish close to the five-year average.”
Editors note: This article was provided by Cushman & Wakefield with additional editing by Commercial People – If you’re looking to rent an office or buy an office in Manchester be sure to take a look at our website for more information, using the links below: