In line with the wider UK office investment market, Manchester saw low activity recorded across the last 12 months as a result of the wider macro-economic headwinds, with transactional volumes for 2024 standing 55% below the 10 year average. In Q4 2024, however, there were definitely signs of returning investor confidence with an uptick in demand and offers. There is now a weight of capital seeking opportunities and this has been evidenced by the number of active bidders on Savills recent sales where 15 bids were received on the sale of 4 Hardman Street, Spinningfields, and the off-market process on Citygate, Mosley Street included three rounds of competitive bidding.

Who is buying?

Given the robust fundamentals on offer in the city in terms of a limited prime office supply pipeline, combined with a strong occupational market, 2024 saw interest from a range of investors including overseas buyers, property companies and private high net worth individuals. The global appeal of Manchester is driven by its notably impressive collection of international occupiers, world renowned universities and a diverse talent pool, enhanced by its strong student retention rate. Alongside this sustained level of appetite from overseas investors and private buyers, we would also expect interest from UK funds for a prime asset with strong occupational and ESG credentials as evidenced in other UK regional cities, where such assets have been brought to market.

What is driving this renewed confidence?

The Manchester office market has hit an inevitable inflection point where pricing reflects a balance of vendor expectations and investor requirements which are beginning to align. This will naturally drive competition within the market and increase liquidity, with an expectation of increased transactional volumes through 2025.

The combination of increasing stock levels driven by greater proactivity from vendors and a strong underlying occupational market with robust rental growth prospects has all contributed to an improved market sentiment and this has led to prime regional office yields hardening by 25 basis points in March 2025 to 6.75%.

Continued growth for 2025

Building on the momentum generated in Q4 2024, office investment in Manchester has seen a strong start to 2025 with in excess of £115 million already under offer, which is a stark contrast to the same period as last year. In addition, there are further opportunities currently in the market and being prepared for sale. This activity offers a solid indication that confidence is returning and that investors are recognising the opportunity offered by current market dynamics which we anticipate will support a recovery in transactional volumes in 2025, with a return closer to the long-term average.

Further information

Contact Oliver Foster

UK regions report a year of growth across office occupational and investment markets