Manchester, showcased worldwide through its football legacy, music and student population, is a unique business location
This proven track record, self-belief and global profile have established Manchester as a leading UK city that outperforms throughout Europe. This confidence is reflected
in the improving office take- up in the Greater Manchester
region, which stood at 1.8m sq ft in 2012. Prime office rents in the city centre have
established themselves at £30 per sq ft and inducements are slowly reducing in line with the grade A supply pool. The office investment market in Manchester is
somewhat polarised, with strong demand for prime, well-let and well-located offices that provide asset-management opportunities. As well as interest coming from UK institutional investors and, more recently, cash-rich property companies, we are also seeing a number of European funds looking to increase their property holdings within the city.
However, the scarcity of stock in the market is
proving frustrating. Just two office transactions of more than £20m took place in 2012 – 4 Hardman Square, acquired by the German fund GLL, and 1 New York Street, bought by Invesco. The sale of 1 Angel Square for £142m to
RREEF Real Estate earlier this year is a major boost for Manchester, however, which also saw Malaysian and Chinese investors both taking major stakes in the city for the first time by acquiring the Co-operative Group’s new headquarters. Calls are increasing from UK and overseas clients seeking to invest large sums of money into the region, partly because of the value the region offers over the London markets, combined with a robust regional economy. And while this is a reason to buy in the area, it
may also be a reason for vendors to consider their longer-term strategy.
Patrick Joynson, head of Manchester, Savills UK
There is strong demand for prime, well-let, well-located offices… but the scarcity of stock is proving frustrating