16th January, 2015

Manchester city centre has experienced a record year of office take up with 2014 totalling 1,332,596 sq ft in 319 transactions, according to Manchester Office Agents Forum (MOAF). This figure represents the highest take up in over 10 years and is only 295 sq ft less than the highest ever figure recorded in 2001.

MOAF confirmed that office take up was up 55% on the 2013 and is up just under 39% on the city's 10 year average. 2014 was not dominated by any single large letting with the growth down to an increase in take up across the whole market, confirming that Manchester's economy is continuing to thrive across all business sectors and at all levels.

The most notable transactions and buildings of 2014 were 3 Hardman Square with over 65,000 sq ft let to Towergate Insurance and TLT Solicitors, Slater and Gordon's acquisition of 58 Mosley Street totalling 107,182 sq ft, just under 100,000 sq ft being let at Piccadilly Place in two transactions to NuGeneration and Barclays Bank, ASK's First Street development successfully let just over 100,000 sq ft to Trader Media Group, Ford Capital and Gazprom and One St Peters Square was successful in securing over 54,000 sq ft with the recently announced letting to DLA and further expansion space for KPMG.

Anthony Howcroft, Associate Partner at WHR Property Consultants and spokesperson for MOAF, comments: In a year when significant devolved powers were announced for Manchester, the city's office market has proved itself to be a powerhouse on the national stage. This bumper year has been as a result of improved demand across the whole market with all price points and size brackets experiencing growth in 2014. Significantly, the number of transactions at rents above £25.00 per sq ft has more than doubled, both in terms of the amount of space transacted and the percentage of the overall market, accounting for over 21% of all office space leased in 2014, this confirms the rental growth much talked about throughout the year.

A key factor underpinning the strength of the Manchester office market has been the significant inward investment, with new entrants attracted to Manchester including TLT Solicitors, Towergate Insurance, Trader Media Group and Ford Capital selecting Manchester for their business expansion, all highlighting the strong economic and employment demographic characteristics of the city as the key drivers in their decision making.

MOAF are predicting the increasing demand and a limited supply of Grade A office accommodation will continue to fuel rental growth in 2015 with headline rents already reaching £32 per sq ft with members of MOAF predicting that there will be a further increase in headline rents and a reduction in incentives for prime stock.

Howcroft adds: There was a big increase in Grade A activity in 2014 with new build Grade A accommodation alone accounting for just under 200,000 sq ft, this figure doesn't include previously occupied space such as 3 Hardman Square, 58 Mosley Street and First Street. We would expect to see the existing Grade A accommodation absorbed throughout 2015, but with new developments due to complete in 2016 including MUSE Developments One New Bailey, Tristan Capital's partnership with ASK at 101 The Embankment, Allied London's Cotton Buildings in Spinningfields and Two St Peter's Square now on site, we fully expect Manchester City Centre to continue its strong results and continue to outperform all other key UK regional cities.

The exceptional occupational market has been fundamental in attracting new investment into Manchester. With just under £1 billion of office assets traded during 2014, Manchester has cemented its place as the key business centre outside of London.

South Manchester continued to perform well with take up reaching 574,701 sq ft which is only slightly down by 2% on 2013, adding to the strength of Greater Manchester as a whole. Large occupiers continue to be attracted to South Manchester with Key transactions including Costain taking 38,507 sq ft and Emirates 23,543 sq ft at Manchester Business Park at the airport, Chiesi taking 18,643 sq ft at Manchester Green, John Lewis expanding into a further 24,630 sq ft at Towers, Didsbury , CDL taking 30,000 sq ft at Kings Reach, Stockport and Contour Housing purchasing 23,582 sq ft at Christie Fields. Salford Quays and Old Trafford accounted for a further 128,457 sq ft and although down on 2013 takes the total recorded office take up for Greater Manchester to over the 2 million sq ft mark, capping off a landmark year for the region.

MOAF exists to promote better knowledge of the Manchester City regional office market, providing accurate market statistics and informed market commentary. Formed in 2009, its current members include BE Group, CBRE, Canning O'Neill, Colliers International, Cushman and Wakefield, DTZ, Deloitte, Edwards and Co, GVA, JLL, Knight Frank, Lambert Smith Hampton, Matthews and Goodman, OBI property, Savills, TSG Property Consultants and WHR Property Consultants.