Manchester city centre office take-up this summer was almost 50 per cent above the five-year-quarterly average, according to research from Bilfinger GVA.
In its ‘Big Nine’ review of the regional office occupier markets the commercial property agent claims Manchester recorded the highest level of office take-up outside of London with a total of 373,477 sq ft in the third quarter of 2015 — exceeding the five year average of 252,461 sq ft.
The impressive office take-up figure was driven, the report says, by pre-let activity at Allied London’s 160,000 sq ft XYZ Building in Spinningfields, due for completion next year. It has seen three tenants sign up in quick succession, including the largest deal of the third quarter, NCC Group taking 60,300 sq ft.
Activity in Manchester has also continued to dominate the report’s top five deals table, with the third largest deal seeing Gazprom take 51,200 sq ft of office space at 5 First Street and the fifth largest deal of 32,619 sq ft let to CIS Insurance at Arndale House.
Manchester led the third quarter activity for out of town take-up recording 282,869 sq ft, almost 30 per cent above the quarterly average of 215,144 sq ft. The largest deal in the region saw Syngenta, the Swiss agrochemical and seed producer, take 32,330 sq ft at Crescent House in Didsbury.
Bilfinger says that whilst take-up levels across the country between July and September have been more restrained compared to earlier in the year, its report shows that 2015 has seen the highest first to third quarter take-up — 6.9 million sq ft — since the start of the recession.
“The juggernaut that is occupational demand in central Manchester continues on at great pace with both pre-let activity as well as the absorption of a diminishing supply of built and available prime space,” explained Chris Cheap (pictured), a senior director in Bilfinger GVA’s offices team.
“This continued activity firmly underlines the view that Manchester is at the forefront of the UK core city movement and will be the metaphorical engine room of the much heralded Northern Powerhouse.
“It is interesting to note that large scale demand is coming from a wide and varied range of sectors including energy, media and technology.
“With only a few of the bigger indigenous professional services companies left to relocate, it is important that Manchester continues to pursue diverse demand streams to reaffirm its outstanding track record of attracting occupiers and fulfil the wave of new prime development that will soon be upon us.
“It is encouraging to see higher levels of take-up return to decentralised Manchester markets,” he added. “Whilst the accessibility of these locations remains a key driver for occupiers, it does appear that there is a flight to destinations which offer a discount to central Manchester rents which are seeing upward pressure.”
