^{Source: Savills Research}

■ The third quarter this year was swelled by several large lettings, including 77,449 sq ft to the DWP at Two St Peter's Square, and 69,000 sq ft to Clyde & Co at Manchester Royal Exchange.

■ The strong leasing activity in the City centre has compensated for a slightly quieter year in Salford Quays. The South Manchester market has also seen an improvement in take-up levels on last year, and this brings the overall total take-up for the three main office submarkets to 1.5m sq ft, compared to 1.2m sq ft for the same period last year.

■ Strong leasing activity, particularly for Grade A space, has led to a continued fall in the Grade A availability across the City. We estimate that there is currently only 340,235 sq ft of Grade A office space available for occupation in the next six months in the core, which compares to an average annual take-up of such space of 350,588 sq ft per annum.

■ Grade B availability however has risen this year, albeit only from 2.4m sq ft at the end of 2016 to 2.6m sq ft at the end of Q3 2017.

^{Source: Savills Research}

■ Looking ahead we expect that the strong leasing market will lead to more refurbishment completions, and these will go a little way towards satisfying the supply/demand imbalance at the prime end of the market.

■ What development and refurbishment activity is planned for 2018 and 2019 will not be enough to stall the steady rise in headline rents that have been achieved on Grade A space in the City centre over the last few years. The latest lettings at Two St Peter's Square and Vantage Point demonstrate that rents in excess of £33/sq ft are eminently achievable, and we expect to see further gentle upward pressure on headline rents over the next few years (albeit at slower rate than has been seen in 2014 and 2015).

^{Source: Savills Research}

■ The strong occupational story has continued to stimulate investor interest in the City in the third quarter of 2017. We estimate that nearly £600m of office investments have changed hands in Manchester and Salford over the first nine months of this year. This means that the full year total is likely to be well in excess of 2016's £705m.

■ Prime office yields in the City have been stable at around 5.0% for several years now. The high level of investor demand and lack of suitable assets for sale could put some downward pressure on these yields in the short term.

^{Source:  Property Data}

^{Source: Savills Research}