Two-tier office market persists in Manchester
Savills says the market for available office space in Manchester is set to continue to be split into two tiers. The group says demand remains strong for larger floorplates, which are becoming more scarce, but there has been a distinct lack of interest from occupiers for floorplates below 10,000 sq ft.
James Evans, office agency director at Savills, says there is a noticeable divide in the market and fierce competition between landlords for smaller enquiries. “This is set to continue in the short term although with no new completions set for 2010, looking forward we expect that those occupiers seeking to relocate will need to compromise on some of their criteria, the main one most likely being the ability to relocate to one floorplate. This should provide some welcome light at the end of the tunnel for landlords of smaller properties,” he adds.
Savills says research predicts that the take-up figure for Manchester offices for 2010 will be over 1m sq ft. This includes the proposed Co-op commitment to 328,000 sq ft. During the first half of 2010, 318,004 sq ft was taken up, of which 34% was Grade A. The group Savills says the professional sector dominated demand, accounting for 24% of the H1 2010 take-up.
The group says headline rents for offices in Manchester have remained fairly resilient and currently stand at £28.50 per sq ft. As the development pipeline is muted, Savills expects prime Grade A rents to rise, and rents for smaller, secondary space to fall further in the short term, with incentives firmly set in the tenant’s favour.
