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Co-operative's new headquarters

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8:50 am, February 8, 2010
Co-op move will rescue ‘difficult' year for offices, says DTZ

By Simon Binns

A new report into the Manchester office market claims 2010 will be “another difficult year” for lettings, although the new 325,000 sq ft Co-operative's headquarters will help boost take-up.

A report from commercial property consultancy DTZ said that despite challenging conditions for occupiers, take-up in Manchester remained “relatively resilient” in 2009 compared to other regional centres.

City centre take-up reached 332,000 sq ft in the final quarter of the year, boosted by three lettings to the Manchester City Council, and occupier activity and investor sentiment for good quality office space still “compared favourably” with other UK cities.

The city council took 145,000 sq ft of space at Ask Developments' First Street; 26,000 sq ft in Elliot House on Deansgate and 9,300 sq ft space on Universal Square in Ardwick. Engineering consultant Faber Maunsell and call centre operators accounted for some of the larger private sector lettings in the final quarter.

Annual take-up for 2009 was 809,000 sq ft, down almost 20 per cent compared to the five year average, but the fall is accounted for “almost entirely by a drop in demand for secondary stock,” said the report.

Availability increased with 1 and 2 New York Street, 4 Piccadilly Place and Brewer Street all completed in the final quarter. Prime headline rents were unchanged at £28 per sq ft with the value of incentives on prime space also static at around 18 months on a five-year lease

“After a relatively strong period of completions in 2008 and 2009, development is expected to fall back sharply from 2010 onwards,” it said. “Availability is likely to have peaked in 2009, but it is likely to remain elevated over the short term, in line with subdued leasing activity, particularly for secondary grade space and lower.”

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