Take-up

Total take-up for the Manchester City Centre market reached 351,000 sq ft in Q3 2023. This was 8% above the 2022 Q3 total and 23% above the five-year Q3 average for the market. There was also an increase in the number of deals recorded, with 59 lettings recorded in Q3, which was 16% above the ten-year Q3 average.

The flight-to-quality in the market has continued with Prime and Grade A take-up totalling 184,000 sq ft in Q3 2023, which equated to 52% of total take-up, with a new Prime rent of £43 per sq ft being achieved in the market.

Supply

Total availability at the end of Q3 2023 stood at 2.92m sq ft. This represented a decrease of 5% on the Q2 total. Grade A supply also fell in Q3 by 5%, and Prime availability has fallen by 1%. The Prime market in Manchester is considered to be undersupplied, with just 1.1 years of supply based on average demand in this sector.

Consequently, the total vacancy rate for the market decreased from 12.1% to 11.5%. The Prime and Grade A vacancy rate was 5.1% as a proportion of total market stock.

Take-up by business sector

The 'Professional' sector was the most active in Q3 2023 on a sq ft basis, accounting for 29% of overall take-up. Take-up reached 101,000 sq ft from this sector, spread across 13 transactions, with the largest transaction being the 27,000 sq ft letting to the law firm Pinsent Masons at No.1 St Michael's.

Elsewhere, the 'Public Services, Education & Health' sector also had a particularly strong quarter, accounting for 28% of total take-up. Take-up from this sector amounted to 99,000 sq ft, across seven lettings.

Rents

The Prime rent in Manchester increased in Q3 2023 to £43 per sq ft, which was achieved at No.1 St Michael's. This is a significant success for the market which has experienced 18% rental growth over the last five years. Looking further ahead, the latest five-year forecast predicts that the top rent will grow by at least 9% to £47 per sq ft by the end of 2027. Savills also expects average Grade A rents to grow, with the falling Grade A availability in the market.

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View all of our latest Q3 2023 Occupational Office Data research here.