Lack of Grade A Property in Manchester City Centre – LSH’s Manchester Office Report 2012

Lambert Smith Hampton’s Manchester Office Report 2012 shows that the Manchester office market has suffered its worst year for a decade while the regional markets of South Manchester and Salford Quays have performed reasonably well during 2011, especially considering the prevailing economic conditions throughout the year, according to David Thwaites, Associate Director at Lambert Smith Hampton in Manchester.

“The number of transactions has remained consistent although take-up has decreased, due to the lack of large corporate activity”.

The Greater Manchester Office Market 2011 reports states that the first three quarters of 2011 witnessed a marked downturn in activity in comparison to 2010, which saw a record take-up of office space in Greater Manchester. This has mainly been due to the reduction in occupational activity within the city centre market.

The total take-up of office space for the year within the City Centre is expected to be in the region of 700,000 sq ft, which if confirmed, would be 30% under the long-term average of 990,000 sq ft, and nearly 50% down on last year.

David Thwaites added:  “Although take-up for office space is likely to be significantly less this year for Greater Manchester, take-up of 868,000 sq ft at the end of Q3 demonstrates that Greater Manchester is still on track to outperform its nearest competitors, Bristol (545,000 sq ft) and Birmingham (534,000 sq ft).

The report also shows that Manchester, along with Bristol has just over two years available grade A supply. In comparison there is nearly five years supply of office space in Leeds and Edinburgh which is currently available.

David added: “Take-up within Manchester City Centre in recent years has consistently exceeded that of other provincial cities. However, the current lack of grade A supply and new build development, until 2014 at the earliest, is becoming an issue for those firms wanting to relocate or expand and grow in the city, whilst it may also deter occupiers from outside the region from opening or setting up in the area.”

David concluded: “Over the next couple of years, the shortage of grade A accommodation will create opportunities for Landlords of existing grade B buildings who are able to deliver sustainable efficiencies in costs and flexibility of design that are increasingly being demanded by occupiers when relocating.”

A full copy of the report can be viewed at: http://www.lsh.co.uk/reports/mancsofficemarket2011/index.html