Posted 9 April, 2013 OBI BLOG
The Manchester city centre office market has enjoyed a strong start to 2013 with take up totalling 274,800 sq ft with 64 transactions concluded. The leasehold take up comprised 254,009 sq ft which was circa 90,000 sq ft higher than Q1 last year.
There were a couple of notable transactions, with on-line car booking agency TravelJigsaw taking 63,000 sq ft at Sunlight House and inward investor WorldPay committing to 22,000 sq ft at Credit Suisse’s 3 Hardman Square. WorldPay paid £30.00 psf on a straight 10 year lease. These two transactions were the main contributors to the Spinningfields district of the city accounting for 40% of the space let during the quarter. It is becoming increasingly evident that Allied London’s Spinningfields continued popularity is appealing to a variety of different business sectors. Buildings such as Quay House, Sunlight House, Tower 12 and Vantage Point have provided an entry to the Spinningfields location for those businesses seeking offices for 10–70 persons. From our experience these occupiers have commonly fed back that being based within Spinningfields increases their visability and credability as a business and assists when pursuing opportunities to grow.
Encouragingly, there were 12 transactions completed for deals in excess of 5,000 sq ft. The administration of Cobbetts Solicitors provided an opportunity for DWF to continue their aggressive growth strategy with the acquisition of the firm. DWF took 15,000 sq ft of expansion space by taking a sub-lease of already fitted-out premises from TD Waterhouse in 201 Deansgate. Cobbetts’ former building 58 Mosley Street is now totally vacant comprising 110,000 sq ft of office space. We are expecting an announcement from the owners of the building shortly, confirming the revised disposal strategy.
There were only six transactions that achieved rents in excess of £20.00 psf. HIMOR’s impressive refurbishment of Clarence House in the central core secured its first letting soon after the works had completed at a rent of £21.50 psf and Vantage Point, Spinningfields (see OBI TV Episode 10) continued its recent success with another letting at a rent of £25.00 psf.
The hot spots within the city centre were within the central core where more than 30% of transactions were completed, totalling 42,500 sq ft of space let. The Portland Street Corridor continued to be in demand with 17 deals amounting to 36,000 sq ft, with the average deal size being circa 2,000 sq ft.
Q1 has certainly been positive in terms of the amount of space let and also the average size of deal has been greater than previous years. We are seeing signs that quoting rents are being achieved and tenant concessions are beginning to harden. The market fundamentals continue to improve and the city centre office market looks well positioned to enjoy a strong leasing year.
Will Lewis is a Director of the OBI Property Offices department and please do not hesitate to contact Will if you would like to discuss the city centre market in greater detail