More and more firms are turning to greater Manchester for office space according to research conducted by Colliers international.
Continued take-up and a ready pipeline of enquiries means over 1 million sq ft of Grade A space will be occupied for the fourth year running.
Colliers said that ongoing enquiries from businesses in the capital, elsewhere in the UK, and also abroad, seeking both talent and cost-effective solutions to their office space requirements, meant a positive outlook for the Manchester office market.
The much-heralded ‘tech’ boom is also being increasingly evident in the city centre with almost 40 per cent of new enquiries coming from the technology sector alone as operators seek access to quality talent.
Leasing activity has greatly depleted the availability of Grade A office space in Manchester with just 230,000 sq ft available in the city core.
New space that is currently being built suffers from a similar problem with a third of unbuilt space already committed to pre-let occupiers.
With funding for speculative development still hard to come by, just two new developments have started in 2017 - the 180,000 sq ft Landmark Grade A office scheme on the former Odeon cinema site bordering St Peter’s Square and 125 Deansgate (formerly Lincoln House).
Colliers’ reported that office market sentiment remained upbeat with a ‘solid’ take-up of 284,497 sq ft of space in the second quarter of 2017, bringing the total take-up for the entire first half of he year to 492,730 sq ft.
Colliers’ research reiterated that, with no new Grade A build completions due in 2018, and demand continuing to squeeze supply, prime rents in central Manchester were expected to continue rising and to hit £40 per sq ft by 2020.
As available Grade A stock remained limited, demand for Grade B office space rose by 10 per cent year-on-year to £27 per sq ft.
Behind the robust nature of the Manchester office market was £170m of investment deals in the first six months of 2017 with the largest transaction being the £66m purchase of CIS Tower by Castlebrooke Investments.
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