Manchester office take-up slumps in Q2

While the number of deals in the city centre was comparable to the first quarter of the year, the amount of space in question was down 15%.

The figures come from the Manchester Office Agents Forum, which reported 179,100 sq ft of office take-up in the city centre over 52 transactions during Q2. That represents a 32,300 sq ft decrease from the previous period, which saw 211,400 sq ft of lettings over 59 deals.

It is important to note that this number does not include Pinsent Masons and Hill Dickinson’s leases for a combined 45,000 sq ft at Gary Neville’s St Michael’s. These two deals will be included in a later MOAF briefing.

MOAF’s Q2 results for 2023 also showed a 29% decline from the year before, where the same quarter brought in 251,400 sq ft of deals.

Richard Lace, director at OBI, caveated the stats by providing a broader picture of the national office market.

“Despite a challenging macroeconomic backdrop, Manchester continues to be one of the best performing regional UK cities in terms of commercial workspace transacted,” Lace said.

“Manchester is not over-reliant on any one sector, and whilst we have seen more muted levels of demand from the tech sector, due to high interest rates and rising inflation, businesses from the legal and professional & financial services sectors remains relatively strong,” he continued.

“Though the recording of Hill Dickinson and Pinsent Masons commitment to St Michael’s will fall into the second half of the year, it does illustrate that headline rents within the city centre remain resilient and continue to rise for best-in-class, ESG-focused, prime Grade A buildings.”

Notable deals with the 2023 period included Arup’s decision to more than double its footprint at 3 Piccadilly Place by adding 15,200 sq ft of space.

Another significant transaction was digital marketing company Dentsu International’s 15,500 sq ft lease at Allied London’s Bonded Warehouse – a relocation from Portland Street.

Lace maintained optimism about the office market.

“The outlook for the city remains positive, with significant size requirements in the market from both existing Manchester business but also new entrants seeking to establish a presence in the city,” he said.

Looking outward

While figures were down in the city centre, office take-up has grown in the areas outside. The Salford Quays and Old Trafford office market reported a 17.5% increase in take-up compared to the previous quarter, with 78,700 sq ft of space transacted. That figure includes RAC Motoring Services’ 22,750 sq ft lease at The Vic.

Over in South Manchester, the take-up numbers were also positive. MOAF logged more than 142 deals in Q2, totalling 146,800 sq ft. This was nearly a 14% increase compared to the rolling quarterly average of 129,100 sq ft.

Seda Pharma Development’s 37,100 sq ft lease at The Lakehouse in Cheadle was highlighted as one of the notable deals in the area during the quarter.

Mark Garner, associate director at CBRE, said the take-up stats for Salford Quays, Old Trafford, and South Manchester were “extremely encouraging”.

“The quality of development in these areas continues to evolve and improve which is driving demand from occupiers looking to secure easily commutable, sustainable workspace that is rich in amenity and communal facilities for their staff,” Garner continued.

“In the last 3 months alone we’ve seen over 500,000 sq ft of new requirements circulated from occupiers looking to secure space within these regional markets. We’re expecting take up to remain strong in the remaining quarters of the year.”

MOAF comprises members from 16 office agencies. It was formed in 2009. MOAF membership organisations are:

• Avison Young
• BE Group
• CBRE
• Colliers
• Canning O’Neill
• Cushman & Wakefield
• Edwards & Co
• Hallams Property Consultants
• JLL
• Knight Frank
• LSH
• Matthews & Goodman
• OBI
• Savills
• Sixteen
• TSG Property Consultants