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Content specialist in office design and build.
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In the most recent quarter, take-up in Manchester reached a total of 328,000 sq ft which represented a ~25% increase on the five-year quarterly average and the strongest H1 since 2019. This was driven by a strong quarter for the flexible office sector, which accounted for 37% of take-up, with Cubo’s deal for 59,432 sq ft at No1 Spinningfields the headline of the 52 transactions.
The strong leasing volumes seen in H1 reinforce the appetite for high-quality space in the Manchester market, which is currently undersupplied. The availability of Grade A space, which was reportedly 712,231 sq ft at the end of H1, sits at 2.9%, while comparatively the rest of the market saw a drop to 8.3%.
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Prime rent in Manchester
Prime rent in Manchester rose to £45 per sq ft in the last quarter, making it the UK’s highest-renting city outside of London with an annual growth rate of ~9%. This is predicted to reach £46 per sq ft by the end of the year.
Download The Manchester Office Rent Report 2024 to learn about our outlook for commercial space in Manchester, including a detailed map and highlights of the current trends.
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The cost of office space in Manchester 2024
Location Grade A Rent (per sq ft) Grade B Rent (per sq ft) Central Core £35.00 - £45.00 £28.00 - £35.00 Spinningfields £33.00 - £37.00 N/A Ancoats and Northern Quarter £26.00 - £32.00 £20.00 - £26.00 Piccadilly £32.00 - £34.00 £22.00 - £32.00 Salford Quays £24.00 - £27.00 £16.00 - £22.00 Media City £23.00 - £26.00 N/A Manchester Airport £23.00 - £28.00 £17.00 - £26.00 These costs are a guide provided by local commercial property experts and rent reports. These costs are updated each quarter and are subject to change.
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Vertical market activity
The most recent figures show that the serviced office sector was the most active with deals in the sector accounting for 37% of all transactions. The largest transaction for this sector was for 59,431 sq ft at No1 Spinningfields for Cubo, while Koba’s deal for 28,130 sq ft at 100 Barbirolli was the second largest.
Elsewhere, the professional services sector accounted for 27% of volumes, making it the most active sector across H1. The largest transaction in this sector was for 19,695 sq ft at No1. St Michaels, which was for S&P Global. The city remains a magnet for the tech, media, and creative industries, fuelling demand for dynamic, innovative workspaces.
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Demand for destination office space
The Manchester office market is being shaped by the growing demand for flexible, high-quality spaces that align with hybrid work models and sustainability goals. Businesses are increasingly opting for flexible leases and coworking spaces, while retrofitting older buildings to meet energy efficiency standards.
Grade A office spaces in prime locations like Spinningfields and St. Peter’s Square are in high demand, offering modern amenities, smart technology, and features that enhance employee wellbeing. The trend towards creating offices as destinations is driving the adoption of hospitality-inspired designs, with companies focusing on fostering collaboration and providing an engaging environment for employees.
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Schemes at The Island, St Michael’s and 3 Circle Square, to name a few, are expected to account for the completion of at least 940,000 sq ft of new and refurbished space over the next two years.
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What tenants want
Market activity has been dictated by greater take-up for space that is promoting stronger ESG credentials as employers are seeking higher quality space and amenities to attract teams back into the office.
Tenant aspirations for improved building amenities and sustainability accreditations have forced many landlords to refurbish their assets to enhance the offering. Several buildings have improved their communal amenities in the forms of cafes, collaboration areas and wellbeing spaces as part of active investment into these value-add facilities.
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Eden, a new development boasting Europe’s largest living wall across at New Bailey is a perfect example of this. The 115,000 sq ft building has been designed to meet the UK Green Building Council net-zero carbon in-operation targets and aims to promote wellbeing.
Landlords will continue to refurbish their space to improve the offering to new tenants and meet the demand for top office space. The expectation is that Plug and Play space will continue to be popular among new tenants and will provide landlords with an efficient solution to reduce voids and rent-free periods.
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The outlook for Manchester office space
There is positivity surrounding commercial space in Manchester, with prime rent increasing by 7.5% over the last quarter. The 5-year forecast shows that top rent in Manchester will grow by a further 8% and reach £48.50 per sq ft by the end of 2027.
The flight to quality space will continue and as tenants seek out prime office space in and around the city, rates will steadily grow and the desire for poor-quality commercial space will continue to decline. There are several exciting deals and plans already underway, with a total of 923,000 sq ft is under construction across the city for delivery up to 2025 — 68% of which is pre-let.
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Overall, take-up was strongest in the city centre, 16% above 10-year average. While location is important, current trends show that the quality of space is driving activity. Rent rates and the cost of office space are expected to remain significant factors for tenants in the decision-making process but emerging trends show that businesses are not willing to compromise on the quality of space.
For further advice on the Manchester office market, contact our regional workplace experts. They can guide you through both tenant and landlord markets in greater detail.
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Contact us
Get in touch to discuss your potential office space costs
020 7553 9500
info@oktra.co.uk
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