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The 'Go for it’ factor sparks demand from entrepreneurs for office space in Manchester says latest research by Colliers International

wantspacegotspace.co.uk - The 'Go for it’ factor sparks demand from entrepreneurs for office space in Manchester says latest research by Colliers InternationalGrowth hungry entrepreneurs in Manchester are reflecting improving prospects for the North West and wider UK economy by occupying and expanding into office space.

The latest Net Stock Absorption (NSA) report on the Manchester office market by real estate advisors Colliers International shows increasing demand in the first half of 2013 for offices of up to 10,000 sq

ft in areas such as Piccadilly, Castlefield and the Northern Quarter.

An average deal size of 3,290 sq ft reflects a strong level of activity in the market for offices of 3,000 sq ft to 6,000 sq ft.

Colliers International believes that this rise in activity is evidence of start-up and small and medium-sized business owners in a wide range of sectors including planning, digital, media and technology

occupying offices or expanding into larger space after delaying growth strategies during five years of economic stagnation in the UK.

Rupert Barron, director, national offices at the Manchester office of Colliers International, said: “You could describe this trend as the ‘go for it’ factor as entrepreneurial business owners decide to take

space for the first time or expand in existing or new offices after sitting on their hands throughout the downturn.

“They’ve had enough of stagnation and believe that improving prospects for the economy shown in a raft of economic data prove that now is the time to enact growth plans that have sat on a shelf

gathering dust.”

The NSA report records a single deal in the first half of 2013 for office space in excess of 25,000 sq ft in central Manchester - for 63,096 sq ft taken by online car rental firm Jigsaw Travel at Sunlight

House, Quay Street.

Mr Barron added: “Emphasis in the city centre remains firmly upon the sub 10,000 sq ft market which continues to underpin demand. There is increasing evidence of expansion amongst occupiers in

that size band who are beginning to seek additional space.

“Occupiers which have previously been reluctant to invest capital in expansion are now expressing confidence in the wider regional and national economic picture.”

Take-up of office space in the whole of Manchester in the first half of 2013 totalled 122,128  sq ft, showing that underlying demand was ‘gaining traction’ but that figure was down on the second half of 2012 when figures were skewed by completion of the new Co-operative Group headquarters at One Angel Square.

The supply of Grade A space remains constrained by an ongoing lack of supply with availability down by 15 per cent in the past 12 months and likely to decline further by the end of 2013.

Despite the lack of new office schemes in progress, new Grade A space will become available via projects such as that by Hines and Manchester & Metropolitan Properties to redevelop the former Odeon cinema site into 131,000 sq ft of offices and construction of Allied London’s 1 Hardman Street at Spinningfields being able to commence after MediaCom committed to a 17,000 sq ft pre-let.

The NSA reports that office take-up in Manchester for the whole of 2013 is on course to surpass 1 million sq ft for the first time since 2010 as businesses prepare to finalise decisions in the second half –

for example, law firm Pannone is believed to have a shortlist of options for 80,000 sq ft.

The more positive sentiment and economic indicators have also helped to attract renewed and significant interest in Manchester from investors, with vacant possession freehold prices rising. Small scale refurbishments, such as that involving IVG at One Marsden Street, are evidence of renewed landlord confidence in demand for better quality second-hand accommodation, said the report.

The NSA research showed headline office rents to be stable at £30 per sq ft – confirmed by the recent deal for WorldPay which took a 10-year lease on 22,000 sq ft from Credit Suisse at 3 Hardman Square, Spinningfields.

Posted by The Editor (wantspacegotspace) on 5th August 2013 (updated 19/08/2013)

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