Member Article

Manchester to see rising office rent in 2015

Due to the continuing pressure on supply, office rents in Manchester could rise as high as £35 per sq ft in 2015 according to research by commercial property consultancy Lambert Smith Hampton.

The 2015 edition of the company’s annual Office Market Report revealed that Greater Manchester was the best performing city of the six largest office markets outside London, having seen a record 2.1m sq ft of take-up in 2014 – the largest volume in the market since 2001.

However, while there are six speculative schemes currently underway in the city of more than 100,000 sq ft each, supply pressures in the short and medium term are likely to see headline rents hit £35 per sq ft before the years is out.

Associate director in office agency in LSH’s Manchester office, Josh Levy, said: “During the last cycle we saw headline rents of around £28.50 per sq ft in this cycle we are already seeing between £30-31 being achieved through pre lets.

“The general investor and developer sentiment in the market remains strong and we are seeing landlords looking at asset management solutions to attract occupiers and in one prime space in the city centre we are currently seeing £33.50 being quoted.

“Confidence in the market is going to continue and there is a belief that rental growth will continue across Grade A and also in buildings providing substantially refurbished space where demand also remains strong.”

The research also found that nationally more than 11m sq ft of office space has been earmarked for alternative uses since the relaxation of planning permission rules almost two years ago - an area equivalent to all of the office floorspace in Reading.

The Office Market Report also reveals that take-up in 2014 reached 27.5m sq ft, the highest level since 2001.

Office availability fell by 4% to 51.1m sq ft over the year, even though the market reported a 19% increase in speculative development.

This was posted in Bdaily's Members' News section by Sophia Taha .