New research published by the Manchester Office Agent’s Forum revealed its city centre commercial office market struggled for take-up throughout 2011, dropping below the 10 year average.
The forum revealed that city centre demand had plunged to 700,000 sq. ft., down from 13 million sq ft in 2010. This amount was sustained by the pre-let of 325,000 sq ft to the Co-operative Group at Noma.
The forum said the most notable deal to help the city’s flagging commercial property demand was the 63,000 sq ft pre-let agreed with KPMG at One St Peters Square.
There have been challenging trading conditions for towns and cities across the country, with struggling commercial office take-up, London being the exception to the rule as the capital continues to hold up in the current economic climate.
Associate at GVA and spokesman for the forum, Richard Lace said: “Whilst take-up in the city centre is down on the 10-year average figure of around 900,000 sq. ft., Manchester is showing some resilience against the difficult trading conditions.
“This is illustrated by the pre-let to KMPG which has allowed GMPVF and Argent to kick-start the only predominantly speculative development outside of the London region.”
He further added: “Although 2012 will no doubt be another difficult year, we are confident that occupier demand will remain steady, with significant named requirements in the market on behalf of occupiers including Pannone, BUPA and Aviva.”
Even though commercial property take-up in Manchester city centre performed poorly over the last 12 months, there are signs of buoyancy in the South Manchester, with commercial office space demand increasing from 483,000 sq ft in 2010 to 486,000 sq ft in 2011.
Separate research from the Royal Institute of Chartered Surveyors (RICS) revealed a weakening of the North West commercial property market.
According to RICS’ UK Commercial Market Survey, falling occupier demand and increasing availability in the North West drove down commercial property rental expectations in the final quarter of 2011.
Overall, tenant demand continued to fall throughout the region during the final three months of the year, albeit at a slower rate than in the previous quarter, with 15 per cent more surveyors reporting decreases rather than increases in interest from prospective entrepreneurs and businesses.
The Manchester Office Agents’ Forum said the area surrounding Manchester Airport was particularly active with a number of major transactions including the letting to Simon Carves of 33,000 sq ft at Atlas Business Park, the Shell deal at Concord of 30,500 sq ft and the new 23,000 sq ft Etihad office at MAG’s Voyager building.
Separately, Manchester City football club is hoping to secure more commercial deals through a new London commercial office.
The football club has around ten staff at the commercial property premises in Park Lane who are building relationships with potential commercial partners and international clients, as a spokesman said: “The main purpose of the office is to build financial partnerships with big brands based down there, and it’s also a gateway to Europe.”
The football club gave more detail to its commercial plans at an ‘Inside City’ briefing last Friday at the Etihad commercial property Stadium.
According to TheBusinessDesk.com, which covered the event, Manchester City is aiming to become one of the top five clubs in Europe by income.
The football club has been heavily reliant on funding from its new owner, Abu Dhabi Royal Sheikh Mansour, however is under pressure to be more self-reliant, not least due to the implementation of UEFA’s ‘financial fair play’ rules which will look to encourage more “rationality” in club finances.
