Flight to quality in Manchester office market shows no sign of slowing

The flight to quality in the Manchester office market shows no sign of slowing down, according to a commercial property expert based in the city.

Steve Brittle, Partner at leading property consultancy Fisher German, says that despite the general economic situation, the Manchester office market continues to demonstrate resilience in comparison with other regional areas.

He added that although many businesses are looking to take up less space as a result of hybrid working patterns, there is a ‘flight to quality’ with occupiers looking to commit to better quality space benefitting from premium amenities.

It comes as figures from the Manchester Office Agents Forum, made up of property agents across the city, show that 173,000 sq ft of office space was let in Q1 this year across a total of 50 transactions compared to the 205,000 sq ft in the corresponding quarter last year.

Outside of the city centre, Salford Quays and Trafford saw a combined take up of office space of 52,600 sq ft across 10 deals in Q1 compared to 44,780 in Q4 2023, showing an 18 per cent increase, while in South Manchester, 92,476 sq ft of office space was transacted in Q1 across 60 deals compared to 135,056 sq ft in 84 deals in Q1 last year.

Despite a slight reduction year on year in some areas, Steve added that with a strong number of transactions in the pipeline waiting to complete, the rest of the year remains positive for the Manchester office market.

He said: “One of the main trends we are seeing is businesses prioritising quality over square footage, which not only supports agile working but helps entice staff back in the office.

“Occupiers are looking for communal areas to promote collaboration and touchdown spaces to support fluctuating numbers of staff in the office at any one time, as well as amenities such as gyms, yoga studios and cafes.

“Fitted and furnished space is also increasing sought after by occupiers to help limit the impact of upfront capital expenditure.

“As a result, we are seeing more landlords marketing CAT A+ fitted out space which includes features such as desks and furniture, cabling and meeting rooms and kitchen facilities, so that it’s plug and play and ready to go.

“We are also seeing landlords look to cater for both markets by fitting out a number of floors of a building and leaving some available for conventional leases, with the potential to fit out more depending on demand.

“ESG is also a major factor in the decision-making process for many occupiers, who are looking beyond just EPC ratings and looking at what the building is constructed from, how it was constructed, and its carbon footprint.

“It’s something that’s significantly raising the bar for existing buildings, and landlords are having to make significant investments into refurbishments when occupiers move out.

“The Manchester office market has always been resilient, and we have a good blend of occupiers which is positive.

“At the tail end of last year the education sector was dominating transactions, while currently it is professional services, closely followed by the tech sector.

“This is reflected in the deals we have seen in Q1, with the three biggest office deals completed across the city all being professional services businesses – including the biggest deal which saw Atkins take 38,000 sq ft at Longmead’s 3 Piccadilly Place.

“There are some further big deals in the pipeline which should hopefully result in a very strong year for the city’s office market.”