Savills - General - Manchester,

Date: 18 Mar 2010

Manchester office market improving.

The Manchester office market has shown some strong signs of recovery according to Savills with the incentives on large Grade A floor plates (over 10,000 sq ft) that have been available to tenants over the last two years now diminishing as a result of a decreasing pool of institutional office stock. With this trend now expected to continue into the smaller scale Grade A floorplates, the international real estate advisor predicts that 2010 could be the last year of the cycle for tenants to capitalise on incentivised terms.


James Evans, office agency director at Savills, comments: "Over the last 12 months we have seen rents harden and rents frees decrease on large Grade A floorplates as the availability of this type of stock reduces. While this can not yet be said of the smaller Grade A floorplates, this market is expected to slowly follow suit over the course of 2010 thus reducing the window of opportunity for those tenants looking for better quality space and benefit from current incentives."


In terms of take-up in the Manchester office market, Savills confirms that the figure for 2009 was 781,531 sq ft (72,606 sq m), which was largely underpinned by the public sector. Looking forward, the company notes that while there is unlikely to be the same levels of demand from the public sector due to budget deficit, there will still be some inward activity from this market.


James continues: "The Greater Manchester brand has proved very strong over recent months attracting companies such as John Lewis, SPX and BSkyB, which is mainly due to the quality of new space available and its substantial pool of highly skilled labour. With the development pipeline rapidly diminishing over the next two years, the challenge moving forward will be to sustain inward investment. However, with an entrepreneurial Council in place and an established national and international platform, Manchester is in a strong position to attract further inward investment."

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