The North West


North West - Office Market Review By Richard Wharton Director JLL Manchester


And in an encouraging trend many occupiers are now reversing this pattern by increasing their footprint either by merging offices in a larger, single space, planning for future growth and recruitment or directing/ encouraging their staff to be more office rather than home based. The growth in office building amenity is helping this drive with coffee shops, rooftop terraces and balconies, basement gyms, secure cycle hubs and David Lloyd standard shower and changing facilities all becoming commonplace and helping those businesses driving a return to the office.


The region’s largest deals ticked a number of boxes which we use to measure the health of the market including the increased number of inward investors, the most active sectors – namely professional services, TMT & public sector - continuing to dominate and headline rentals reaching £40psf with the letting of the top floor at Landmark, St Peter’s Square, to Xero.


PHOTO - Landmark


At the time of Brexit I thought nothing more disruptive would emerge during my working career but the relentless uncertainty brought about by the covid pandemic, war in Ukraine, political upheaval and the cost of living crisis has quickly put paid to that. What these issues has forced occupiers to do is not simply close their office and tell their staff to work from home – which at one stage during Covid was certainly a possibility being considered by many companies – but to re-think how their office is used, how best to incorporate new ways of working into these plans moving forward and how to use their workspace strategy to help deliver the sustainability & ESG goals which most businesses have now set.


This has lead to a resilient market during 2022 and so far in 2023 with both the annual take-up and number of deals up on 2020 & 2021 volumes, overall vacancy levels declining (albeit still above average in most markets) and upward pressure on headline rents as the flight to quality trend from 2021 continues. Although there were more leases signed in 2022 compared to the previous year the average deal size fell below 4,800 sq ft.


The trend towards downsizing (or “right-sizing”) was evident throughout the Big 6 cities (Manchester, Birmingham, Leeds, Bristol, Edinburgh & Glasgow) with Manchester maintaining its’ position as the most active city outside of London and this trend is continuing into Q1 this year as occupiers start to implement their post covid hybrid working strategies incorporating in most cases a degree of working from home but a definitive directive that all staff are required to be in the office for a certain number of days each week.


The flight to quality was a term coined during 2021 as occupiers saw the benefits of improving the quality of their office space as, coupled with a downsize in floor area, costs could still be reduced or at least maintained and as mentioned earlier a better quality office in a prime city centre location with enhanced amenity and ESG credentials is key both in encouraging staff back to the office but also recruiting new staff, the vast majority of whom not only prefer to be office rather than home based but want to work for businesses who have ESG high on their corporate radar.


Two further trends are prevalent and worth noting, firstly the continued expansion of the flex market following the halcyon days of 2019 when WeWork & IWG each opening a number of new centres in the North West, a drastic reduction in 2020 due to covid, a spike in 2021 as landlords sought to reduce voids in an uncertain market and a reassessment in 2022. Despite the majority of these being by way of management agreements rather than conventional leases, owners of larger schemes have seen the benefit of accommodating a flex operator this enables them to let the remaining space in the building quicker.


And finally, the growth of the plug & play market which can be split into 2 areas, firstly landlords speculatively investing in a cat B fit out and rentalising the cost at a premium to occupiers and secondly occupier “grey space” which they have vacated but for which they continue to hold a lease. The former is helping drive rentals as mentioned earlier, the latter offering occupiers speed of delivery and flexibility without the expense of service space.


£3m Commercial Property Instructions Mark Latest Phase of Breakey & Nuttall Business Development


Instructions to sell two commercial properties with a total price tag approaching £3m demonstrate the latest step-change for an Oldham firm of chartered surveyors and property advisors


The new instructions follow a sale of the ‘Talking Point’, a former church property in Scouthead, Saddleworth, which successfully completed last year and now offers a unique bridal experience.


that


started out with just one property on its books.


It is the latest upsurge in business for Breakey & Nuttall, an RICS (Royal Institution of Chartered Surveyors) registered firm, which emerged relatively unscathed from the COVID-19 pandemic to post a record turnover in 2022, the firm’s best financial year to date, which it now hopes to eclipse in 2023.


One of the properties is a modern two-storey office building on the Broadway Business Park, just off the M60 in Oldham, inviting offers over £1.3m, while the other is a 1.3 acre development opportunity, comprising a former restaurant in Westhoughton, near Bolton at £1.5m.


Partners, Chris Breakey and Joanne Nuttall, who between them have 55 years combined commercial experience of working in Oldham and North Manchester, currently employ a team of 11 surveyors and support/administration staff, which includes the appointment of Becky Heselwood, Portfolio Manager, and Oldham College student and apprentice, Renee McKenzie.


Joanne commented “Instructions of this type and quality would usually be dealt with by city centre and national agencies which demonstrates our growth and continued investment in our team.”


“Since the pandemic, we’ve assessed the business as a whole and are looking to the future with some exciting developments ahead, including a new website, market leading software and CRM systems. Our people have always been our biggest asset and achievement and we will continue to look forward to offering a continued and unrivalled commercial property service across North East Manchester and into West Yorkshire.”


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COMMERCIAL PROPERTY MONTHLY 2023


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