The Manchester office market went from strength to strength last year, and the current limited supply of Grade A office space means the sector is ripe for the picking in the northern city.
Last year ended on a high for Manchester’s office space market with take-up rising to 1.208 million square feet, spread over 271 transactions throughout the year, according to figures from the Manchester Office Agents Forum (MOAF).
Demand for top-grade offices in the city is at an all-time high, and there is only around 160,000 square feet of Grade A office space currently available, meaning there are ample opportunities for investors and landlords looking to refurbish commercial space to capitalise on the rising rents in the sector.
Office buildings are split into three different grades defined by their age, amenities, aesthetics and general infrastructure. Grade A are the highest quality and most sought after type, popular among major banking, property and law firms. Class B are more middle-of-the-road spaces, while class C tend to be poor-quality buildings in undesirable locations.
Top transactions in Manchester
The key transactions in Manchester from Q4 last year include Riverside at 28,749 square feet, owned by Bruntwood and occupied by AO; Bridgewater House at 20,034 square feet, owned by APAM and tenanted by Manchester City Council; and Arkwright House at 15,045 square feet, owned by Catalyst Capital and taken up by Push Dr.
In terms of investment, the total amount achieved in the last quarter of 2017 was £491m, which is a significant increase of £171m on Q3, and £459m higher than the same period the previous year. However, the figures were bolstered by Manchester’s biggest ever single office deal, which saw Number 1 Spinningfields bought by Schroder REIM for £200m.
Scott Shufflebottom, associate director at real estate advisors Colliers International, said: “The strong end to 2017 reinforces the sentiment of Manchester being the most active office market outside of London.
“The dust has yet to settle on the decision for the UK to leave the European Union but it is the collective view of MOAF that there will be no long-term negative impact on the city centre office market.
“Due to the unrivalled quality of both the existing and proposed developments and the strong levels of demand from both indigenous and inward investing occupiers, we have full confidence that the rental market will continue to prosper.”
