As we continue to navigate the various macroeconomic challenges of the past few years, we have witnessed structural shifts within the office market, resulting in both tenants and landlords rethinking the space needed to best suit their requirements. It’s no secret that there is an increased demand for lease flexibility and flexible workspace, particularly for the many occupiers who are not yet ready to make long-term decisions, thus the allure of fitted space. 

In Manchester, fitted space has continued to trend upwards, appealing to businesses past start-ups and scale-ups. In 2022, fitted space accounted for 10.82% of total take up and a year later this has significantly risen to 18.62%.  The city also experienced an 18% increase in the number of completed fitted and furnished deals in 2023 when compared to 2022, accompanied by a noteworthy 14% rise in the average deal size.

The appeal 

It’s easy to see why fitted spaces hold such appeal, particularly in the current climate. Not only does it save an occupier from committing to significant capital expenditure upfront, but it also reduces delivery risk and saves time. From a landlord’s perspective, this alternative specification can speed up the leasing process and attract differentiated occupier types, with a diversity of product appealing to a wider demographic of potential tenants. Such an approach is not without challenges, given the requirements for capital expenditure by landlords; however, with shorter voids, reduced incentives and rental premiums of 20–25%, the leasing case for such a strategy is compelling. In many cases fit-outs can also be recycled after shorter lease terms.

Success stories 

As mentioned, fitted space can speed up the leasing process and this is exemplified by Cornerblock. APAM delivered 5,000 sq ft of fully fitted space on the sixth floor which was let within three months of completion to One File at £32.50 per sq ft. Following this success, they also took this approach to the fourth floor and delivered another 5,000 sq ft which was immediately let to Strativ Recruitment at £32.50 per sq ft. Savills is now marketing another 3,300 sq ft of fully fitted space, which is already attracting interest. 

XLB have also had a number of successes across 35 Dale Street and Fourways. Following success on a number of speculative fitted suites including 7,700 sq ft at 35 Dale St which was acquired by SLR, they have recently delivered a 5,700 sq turnkey solution for the sports and retail licensing company Levy Merchandising (images attached/above) at Fourways. We are now achieving rents in the late £30s per sq ft and the Fourways is now fully let. 

At Windmill Green, 4,726 sq ft was immediately let to Hempsons at £38.00 per sq ft following completion of the CAT B works and off the back of this, we delivered another 4,726 sq ft of turnkey space for LSH. 

It’s clear that there is a growing demand for fitted spaces in Manchester, leading landlords to integrate more of these ready-to-use suites into their assets. While traditional office space is still valuable in the current office market, occupiers and landlords looking to navigate the evolving market will stand to benefit from the allure of fitted space.

Further information

Contact Daniel Barnes

Savills Manchester