MOAF: Office take-up falls again in Q3   

A total of 70,000 sq ft was let in Manchester city centre during the third quarter, an 8% drop on the previous three months as Covid-19 continued to disrupt the market. 

The latest figures from the Manchester Office Agents Forum show that city centre office take-up was down from  76,000 sq ft in the second quarter of 2020, and down 73% year-on-year compared to the 295,379 sq ft transacted in Q3 2019. 

Lettings during Q3 included the Spanish Consulate taking 11,000 sq ft at Topland’s The Chancery, and pensions advisory firm Isio agreeing to lease 9,000 sq ft at Royal London’s 3 Hardman Square in Spinningfields. 

So far in 2020, a total of 450,675 sq ft has been let in Manchester city centre, thanks largely to the 310,000 sq ft transacted in Q1 prior to the pandemic, according to MOAF.  By the end of Q3 in 2019, 1.1m sq ft of deals had been signed. 

Isio took 9,000 sq ft at 3 Hardman Square

Q3 2020 saw a drop in overall space taken compared to the previous quarter but the number of deals completed rose. In Q2, 20 contracts were signed compared to 28 during the most recent three months. 

In particular, September saw 15 deals complete, the highest monthly figure since lockdown restrictions came into force in March. 

Andrew Cooke, associate in the office agency team at Savills in Manchester, said: “Despite another challenging quarter, we remain positive that take-up activity will rebound in 2021.  

“Enquiry demand picked up during Q3 and, while the vast majority of these have been from SMEs, we have seen the likes of BT committing to 175,000 sq ft at the beginning of Q4. We anticipate other large corporates making decisions on their real estate strategies over the coming months.” 

The BT deal alone will see Q4 figures outstrip take-up for the previous six months combined but, even with the fillip provided by the communications giant’s New Bailey letting, 2020 is on course to fall well short of the 1.45m sq ft snapped up 2019, according to MOAF. 

Outside of the city centre, South Manchester continued to feel the effects of the current climate, recording a total take-up of 40,000 sq ft across 42 transactions, down from 60,000 sq ft in Q2. 

BT signed for 175,000 sq ft at New Bailey at the beginning of Q4

Salford Quays and Old Trafford also suffered a decrease in take-up, down to 45,300 sq ft from 77,000 sq ft in the previous quarter. 

However, Salford Quays recorded the largest deal of the quarter with global technology company Tech Mahindra taking 23,580 sq ft at Peel L&P’s The Vic. 

Matt Pickersgill, office advisory at Lambert Smith Hampton, said: “The pandemic is continuing to have an effect on the overall performance of the office market, not just in Greater Manchester, but also nationally. 

“However, we are encouraged by the fact that we are still seeing commitment from global occupiers such as Tech Mahindra and BT, and a number of larger corporate occupiers are also still looking to complete on deals before the end of the year.” 

The MOAF forum comprises the commercial property agencies Avison Young, BE Group, CBRE, Colliers International, Canning O’Neill, Cushman and Wakefield, Edwards and Co, Hallam Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI, Savills, Sixteen and TSG Property Consultants.