Take-up

Manchester city centre take-up reached a total of 206,763 sq ft in Q1 2022. This was 12% below the Q1 2021 total and 24% below the 10-year Q1 average for the market.

There was a total of 70 individual transactions in the first quarter of 2022. This was the highest volume of Q1 transactions since 2018 and 32% above the long-term average figure for Q1 deals. This demonstrates that activity within the smaller end of the market remains buoyant as decision making within those businesses seeking larger-scale relocations remains slow.

Supply

Total supply marginally increased in Q1 2022 by 1%. This occurred, in part, due to the introduction of an increased quantum of second hand Grade B stock that is dated and not as relevant to the current specification requirements that are becoming increasingly essential to office occupiers within the market.

Grade A supply currently sits at 827,000 sq ft, which represents a significant 16% decrease on the Q4 2021 total. The total vacancy rate remains at 14.2%, whereas the Grade A vacancy rate declined to 3.3%, a decrease of 60 basis points in 2022.

Take-up by business sector

The TMT sector continues to perform strongly in the market. TMT was the most active sector in Q1 2022, accounting for 29% of take-up, totalling 59,000 sq ft. The largest letting was to Telecom, who acquired 11,500 sq ft at Northstar.

Elsewhere, the Professional and Business & Consumer services sectors also recorded a strong start to the year. With office occupancy levels increasing, Savills expects take-up in these sectors will continue to grow throughout 2022.

Rents

Prime rent grew by 3% in Manchester in 2021, standing at £38.50 per square foot at year end. Whilst there was no prime rent increase in the first quarter of 2022, there remains further optimism for growth over the remaining three quarters of the year in a market which has seen 13.2% growth since 2016. The highest rent achieved in Q1 was £34 per square foot. With a number of prime Grade A requirements currently considering their options, Savills remains confident that prime rent will break the £40 per square foot level in 2022.

Interested in other areas of the UK?

View all of our latest Occupational Office Data research here.