Savills’ latest Spotlight: Manchester Office Market Report states that the city was a key focus for investors in 2015, with office transaction volumes totalling £640m compared to a 10-year average of £428m.
In the first half of the year, overseas investors showed particularly strong demand for Manchester office assets, accounting for 70% of all transactions with deals worth £212m. This is well above the long term first half average of 37%.
Examples from the first half of the year include the £115m acquisition of 3 and 4 Piccadilly Place by US-based Ares Management and the £85m purchase of XYZ in Spinningfields by Germany’s Union Investment Real Estate.
Peter Mallinder, investment director at Savills, said: “The outcome of the EU referendum is now sinking in and some office transactions will be inevitably be delayed or renegotiated as investors take stock.
“However, we expect the increased depth of overseas interest in Manchester to help stabilise the market as foreign buyers take advantage of the weaker sterling and reduced competition.”
Despite the lack of trophy letting deals recorded in the first half of 2016, Savills reports that first half office take up reached 415,257 sq ft (38,577 sq m), in line with Manchester’s long term average.
The third quarter has also started positively with law firm Freshfields committing to circa 80,000 sq ft (7,432 sq m) at One New Bailey.
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