HMRC deal underpins Q1 office boom, reports MOAF

Central Manchester’s office market is firmly on course for a fifth consecutive 1m sq ft-plus year, with first quarter take-up more than doubling 2017’s first quarter total at 442,000 sq ft, according to the Manchester Office Agents Forum.

By some distance, the largest deal was the 157,200 sq ft pre-let of 3 New Bailey to HM Revenue & Customs, with the English Cities Fund office, still to be constructed, set to serve as HMRC’s Greater Manchester hub. The deal represents the largest pre-let in central Manchester for more than a decade.

In total, there were 82 transactions completed in Q1, other notable deals included Irwin Mitchell taking 33,400 sq ft and CBRE 11,300 sq ft to fill One St Peter’s Square – deals revealed by Place North West in October 2017.

Together with the 3 New Bailey deal, these transactions accounted for 45% of all take-up in Manchester city centre.

Rob Yates, partner and head of North West office agency at Cushman & Wakefield, said: “The pre-letting of 3 New Bailey is a watershed for the city. We have long been of the view that the supply of quality office accommodation is constrained and savvy occupiers are having to respond to this by committing to pre-lets.

“This deal is a significant milestone for Manchester. Not only is it one of the largest in the city for over a decade, it’s also one of the biggest regional office lettings completed in the first three months of this year. After a strong start we expect the final 2018 take-up figures will top 1m sq ft for the fifth consecutive year.”

In South Manchester, Q1 take-up totalled 178,200 sq ft, a 27% year-on-year increase. Large-scale occupiers returned to this market, said MOAF, as evidenced by the Hut Group’s acquisition of 40,300 sq ft at the 4M Manchester Airport.

In Warrington, first quarter take-up was 70,700 sq ft, a 17% decrease on the corresponding period in 2017. The highlights were at Lingley Mere where 10,800 sq ft was let to Asics and at Cinnabar Court where 10,200 sq ft was acquired by Greensil.

OBI Property’s Paul Mills said: “The Q1 figures for out-of-town office markets are encouraging. There is a good quantity of larger requirements circulating in the marketplace and we therefore expect take up to continue to be very strong during the remainder 2018.”

Formed in 2009, MOAF members include Avison Young, BE Group, CBRE, Colliers International, Canning O’Neill, Cushman & Wakefield, Edwards & Co, GVA, Hallams Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI Property, Savills, Sixteen Real Estate, and TSG Property Consultants.