Manchester offices continued to outperform in 2011 – Lambert Smith Hampton
Take-up of office space in Manchester city centre is expected to total around 700,000 sq ft for 2011, which would be 30% below the long-term average of 990,000 sq ft and almost half the level recorded in 2010, says Lambert Smith Hampton. But the market for offices in Greater Manchester as a whole continued to outperform other regional centres last year, despite the lack of new developments in the city centre.
In new research, LSH says that there was a sharp decline in activity in the Manchester offices market during the first three quarters of 2011 compared with the record-breaking levels seen in 2010, as a result of the fall in occupational activity in the city centre, but take-up for Greater Manchester as a whole of 868,000 sq ft at the end of Q3 remained ahead of the comparable figures for Bristol office space (545,000 sq ft) and offices in Birmingham (534,000 sq ft).
The South Manchester and Salford Quays markets performed “reasonably well” during 2011, the firm says, especially when the economic climate is taken into account. “The number of transactions has remained consistent although take-up has decreased, due to the lack of large corporate activity,” says David Thwaites, associate director at LSH in Manchester.
The lack of Grade A office space available (supply is just over two years in Manchester, as in Bristol – compared with nearly five years of supply in Leeds and Edinburgh) and the scarcity of new development in the next couple of years “is becoming an issue for those firms wanting to relocate or expand and grow in the city,” Thwaites says, “whilst it may also deter occupiers from outside the region from opening or setting up in the area”. He adds that landlords of Grade B properties have an opportunity here, if they can deliver the sustainable efficiencies in costs and flexibility of design that are increasingly being demanded by occupiers when relocating.
