Take-up

Total take-up for the Manchester City Centre market reached 1.2m sq ft in 2022. This was broadly in line with the five-year annual average and marks the second consecutive improvement since 2020.

Grade A take-up totalled 570,000 sq ft in 2022, which equated to 47% of total take-up. The largest Grade A transaction was the 130,000 sq ft letting to the Government Property Agency at Plot 9a First Street.

Demand for 'fitted' offices continues to rise, with 17% of the total number of deals in 2022 being for plug-and-play space.

Supply

Total available supply stood at 3.2 million sq ft at the end of 2022. This was a 10% decrease compared to 2021. Grade A (Refurbished) supply totalled 770,000 sq ft in Q4, and with just 1.7 years of Grade A supply available, the flight to quality remains at the forefront in Manchester. Grade A (New) supply stood at 560,000 sq ft at year end.

As a result of these changes, the total vacancy rate for the market decreased from 14.2% to 12.8%. Similarly, the Grade A vacancy rate decreased from 3.9% to 3% at year end.

Take-up by business sector

The Professional sector was the most active in 2022 for the first time since 2016, achieving 22% of total take-up. This was spread across 54 lettings, the largest being the 63,000 sq ft Grade A acquisition by Deloitte at 100 Embankment.

Elsewhere, the TMT sector was the second most active, accounting for 21% of total take-up. The sector has historically performed strongly in the market as the most active sector in each of the last four years. The largest transaction in 2022 was the 35,000 sq ft subletting to Peak AI at Manchester Goods Yard.

Rents

The prime rent in Manchester increased in Q4 to reach £40.00 per sq ft at year end. This is a significant success for the market which has experienced 18% rental growth over the last five years. Average Grade A rents also increased in 2022 to £34.67 per sq ft. This represented an increase of 8% on the pre-Covid 2019 average. Savills expects this average to continue to grow into 2023, particularly with the falling Grade A availability in the market.

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