According to one of our commercial property experts, the resilient Manchester office market is expected to continue upward for the remainder of 2024, as both the traditional and serviced office sectors remain strong.
Figures from the Manchester Office Agents Forum made up of property agents across the city, reveal that over 332,103 sq ft of transactions were completed in 52 deals in Manchester city centre during the year's second quarter. This was a significant uplift following a slow start in Q1, where 173,000 sq ft of space was let.
In South Manchester, a total of 80,640 sq ft of space was let during Q2 across 62 transactions. Meanwhile, Salford Quays and Trafford Park witnessed a combined take-up of 29,743 sq ft across 10 deals during the same timeframe.
Steve Brittle, one of our partners based at our Manchester office, said the upturn in take-up for the quarter demonstrates the positive sentiment in the city’s office market. He said: “I think the significant uplift was a delayed response from Q1 because of a hold-up in getting deals over the line, for a variety of reasons.”
He highlighted that the three notable deals in Q2 2024 were all from serviced offices or co-working providers, which is an active market. He added: “It is a change in terms of a serviced, flexible market as opposed to the traditional office lease market. Manchester has always had a decent service offering but there seems to be a push towards that type of office space,” he said.
He explained that occupiers then have flexibility rather than having to commit to traditional leases. “Serviced offices are not for everyone, but it means no upfront capital cost expenditure, which is attractive to businesses wanting a temporary solution for 12-24 months if they are new to the market to see if they are going to be successful rather than committing to a long-term lease.
“It also reduces delivery time in terms of not having to wait for a fit-out to be completed because once a business has signed a lease and has the keys, they can start trading because the furniture and desks are already there.”
He anticipates that the upward trend in the office market will continue during the rest of the year due to the pipeline of larger deals that are due to be completed later in the year. He also pointed out the greater demand for offices built to higher construction standards because of the increased importance of Environmental, Social, and Governance (ESG) policies. “Grade A accommodation in Manchester continues to let well, and the recent deals highlight occupiers’ wishes for quality space, great amenities, flexibility, and, importantly, strong ESG credentials. These are now high priorities for occupiers,” he said.
“The importance of ESG credentials and the greenest buildings is more prevalent because tenants want the best in class in terms of wellness, nearby gyms, and coffee shops, and more and more occupiers are becoming ESG-focused when considering office moves.”
Looking ahead, he mentioned the potential influence of the new Labour government on the general office market, though he noted it is too early to predict any specific impacts. “It will be interesting to see if the new Labour government influences the general office market. It is too early to say at the moment so we will have to wait and see,” he concluded.
