Move Commercial – issue number 34Digital Manager
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From Move Commercial
WHAT NEXT FOR OFFICES
Euan Blake, Account Director, Innesco
Take up in Manchester’s office market looks to be on course to surpass 1m sq ft for the first time since 2010 according to latest Q3 office research by the UK’s top office agents.
Colliers states that despite the lack of new office schemes in progress, new Grade A space will become available via projects such as Hines and Manchester & Metropolitan Properties plans to redevelop the former Odeon cinema site into 178,000 sq ft of offices and construction of Allied London’s 1 Hardman Street at Spinningfields being able to commence after MediaCom committed to a 17,000 sq ft pre-let.
Should Barclays search for 80,000 sq ft thought to be under offer at Three Piccadilly Place be completed in Q4 and the reported TMT sector activity continue at pace, then Manchester is certainly on course to surpass the 1m sq ft mark this year.
Commercial agents share similar optimism reporting positive news for regional city centres as economic growth forecasts improve for the better. This in turn is seeing agents like GVA make slight adjustments in average regional office rental forecasts with average rental values to rise by 0.6% this year, 1.7 per cent next year and 2.7 per cent in 2017.
The one challenge that all regional city centres still face is the absence of considerable speculative Grade A office development. The lack of institutional lending to such schemes outside of the M25 has had a detrimental effect on UK cities’ ability to attract developers with the financial firepower to see projects through. But, as optimism grows through an improved economic climate hopefully it won’t be too long before we see some considerable speculative office development forthcoming.