Manchester’s Office Market

The economy in the North West is expected to grow by 2.1% in 2019, with Greater Manchester forecasting a growth rate of 14%! Despite the country’s political uncertainty, Savills has reported that Manchester’s job creation rate could outpace major international cities such as Berlin, Tokyo and Paris over the next couple of years.

Manchester is a fast-growing city and its reputation has grown massively over recent years, attracting an increasing number of businesses to open offices in the city. Recognisable companies such as the BBC, Google, Amazon and KPMG, all now have a presence in Manchester as well as a considerable number of smaller, fast-growing businesses and start-ups.

Manchester has the second highest graduate retention rate (over 50%) of any UK city, only topped by London! This statistic demonstrates the volume of opportunities and talent in the city – an attractive prospect for employers. This statistic, along with the quality transport links and cheaper leases compared with the capital, has resulted in businesses flocking to the city!

Manchester experienced a record take-up of office space reaching 1,750,562 sq ft in 2018 – a 44% increase from the previous year. The trend has continued in 2019, with Q1 seeing 61 city centre transactions amounting to 314,733 sq ft.

Notable deals include:

• Eversheds Sutherland agreed on the pre-let at Two New Bailey Square just under 50,000 sq ft.
• Moneysupermarket has taken up two floors at No.1 Spinningfields, delivering a 22,600 sq ft of space.
• Huckletree is taking over the lower ground, ground and first floors totalling 22,800 sq ft at the Express building.

With office take-up reaching record levels and demand for space only rising, there is a real need for new developments. Landmark St Peters Square Manchester is set to complete this year, delivering 180,000 sq ft of Grade A offices over fourteen floors. Mayfield Partnership is to submit plans for the first phase of its £1.1bn Mayfield project development which includes an eight-storey commercial office development of 90,000 sq. ft. These developments, amongst others, are quickly becoming let prior to practical completion as Grade A supply in the city is at its lowest level since 2005!

Flexible office space is a key trend which is expected to continue to grow this year. According to Colliers International’s research, Manchester’s flexible office space is expected to expand by circa 50% by late 2022, reaching 61,205 sqm. A notable deal already this year was Space’s announcement of it’s largest flexible workspace to date in the UK at 125 Deansgate, set to open in early 2020.

Manchester is growing year on year at an impressive rate. The number of cranes across the skyline is expanding constantly, investor interest only rising and demand for space consistently increasing. It’s a highly active market and it’s been fantastic to watch it grow around us!