Grade A office occupiers in Manchester have plenty to consider – Colliers International
Occupiers still have options for Grade A space in Manchester city centre, says Colliers International. There is still more than 1m sq ft of Grade A space available in the centre, with seven floors offering more than 20,000 sq ft and an additional 24 offering units of 10,000 to 20,000 sq ft, the firm says.
In its latest review of the market for office space in central Manchester, Colliers International notes that recent investment purchases of Grade A office property including the Zenith Building and Ship Canal House have demonstrated a revival in investor confidence. It also notes Aegis’ recent announcement that it plans to sign for 36,000 sq ft at City Tower, after considering five other UK cities, as a sign of occupier confidence. In addition, Lloyds is reviewing its search for 200,000 sq ft and Pannones is considering a variety of new and second-hand options for its 80,000 sq ft search, the firm points out.
Colliers International says that net stock absorption of offices in Manchester continued to increase during the first half of this year, and that 83.1% of office space in the central business district is now occupied. Take-up of office space during the first six months was down sharply from H2 2010 at 300,000 sq ft, as there were no deals of more than 50,000 sq ft. The largest share of take-up during H1 2011 was Grade C space, at 43% of the total, while Grade A property accounted for 25% of total take-up. Colliers International expects much stronger activity in the second half of this year.
“Despite Grade A vacancy still being 20%, we expect a further round of pre-letting activity, with KPMG (70,000 sq ft) shortlisting potential schemes. A substantial pre-let at a scheme such as Argent’s St Peter’s Square would be sufficient to trigger construction,” Colliers International notes.
