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TRANSPORT THE

key

5

Commercial Property Register

September - December 2017

www.compropregister.com

Colliers International are continuing to see

increasing levels of occupational demand in the

office sector within Manchester City Centre,

coming from businesses outside the region,

according to Dominic Pozzoni, Director National

Offices, Colliers International.

“We are seeing more and more National and

International corporate occupiers and clients giving

serious consideration to both relocating and

expanding into Manchester City Centre and the wider

region. This is owing to a number of factors including a highly qualified

and strong workforce, high student retention post-graduation, a mixture

of house price affordability, a comprehensive transport infrastructure, a

fantastic cultural offering and an ever expanding International Airport.

With more and more businesses looking at cost control and with Grade A

rents in Manchester City Centre currently at £35 psf, it offers a compelling

reason to focus on Manchester. Although the digital sector continues to

see growth within the region, other traditional sectors including

financial services, legal and professional services continue to be focussing

on relocation to Manchester.”

As part of the radical change in Manchester over the past decade,

there has been a major expansion of residential property in the

centre.

That has broadened the appeal of Manchester (as has happened in

other northern cities), bolstering the expansion of retailing and leisure

facilities and adding pressure for transport improvements.

However, now Manchester has a problem with the under-supply

of housing, said JLL, which it expects to continue for 5 years. Demand

is being fuelled by increased population in the city and the move to

more city centre living, particularly by young people. The estimate from

Manchester Place is that the city centre population will reach 80,000 by

2024.

JLL’s Stephen Hogg said: “Manchester is attracting - and retaining

-more graduates, young professionals and direct investment. Last year

47 firms set up and created jobs for the first time or expanded their

existing operations, all of which is contributing to demand for city centre

living.” In his view, the current development pipeline means the city

cannot keep pace with demand.

SHORTAGE

looms

NATIONAL

demand

Such is the pressure on the government to

make a success of the Northern Powerhouse,

pressurised by the elected mayors, that

hopes are high for transport improvements

that will make it a success.

Manchester is leading the way with the

growth of its technology sector and the develop-

ment of new commercial spaces.

Some of the transport improvements have

been, or are about to be, made such as the vital

Ordsal rail link between Piccadilly and Victoria

stations. This is due for completion in December

and will be part of a £1 billion investment by

Network Rail in the North. As a result, there will

be more frequent trains to key destinations such

as Manchester Airport, which is undergoing a

major investment programme.

But the real need is for the high-speed line

from Liverpool through the Pennines to Leeds

and Yorkshire.

At least the HS2 line from London via Bir-

mingham to the north has been agreed, despite

a battery of objections from groups who oppose

many of the infrastructure improvements in the

UK.

The importance of the Northern Powerhouse

is being increasingly recognised by companies.

For example, Lambert Smith Hampton (LSH)

has signed a Memorandum of Understanding

with the government to become a member of

the Northern Partnership Programme.

LSH’s Matthew Scrimshaw said: “Since the initi-

ative was launched in 2014, confidence across

the North of England has grown exponential-

ly and we’ve witnessed a significant rise in

investment volumes, record levels of occupier

take-up and more development starts than any

previous cycle.”

That optimistic picture is reinforced by the

statistics for the second quarter with take-up

in Manchester city centre up by 27% compared

with same period of 2016, reported the Man-

chester Office Agents’ Forum (MOAF).

Take-up of offices in the first half was

45,775 sq metres (492,730 sq ft), a rise on the

first half of 2016. A good way of assessing the

figures is that there were 68 transactions in

the period April-June.

Andrew Rands of JLL, who is the spokes-

man for MOAF, commented: “We continue to

see strong levels of demand across the city

centre from both existing occupiers and inward

investors.”

He noted the arrival of WeWork to Spin-

ningfields and Distrelec to 2 St Peters Square,

two significant new arrivals. “There are a

number of potential larger transactions in the

pipeline which suggest that take-up in 2017

will exceed 92,900 sq metres (1 million sq ft)

for the fourth consecutive year.”

While calling the office market “steady with

a declining amount of stock”, Mark Canning

of Canning O’Neill stressed the importance of

linking the major cities in the north with the

HS3 line to “reduce commuter times, take cars

off the roads and boost the economy.”

Andrew Gardiner of TSG Property Consult-

ants said: “The half year figures for out of

town offices are encouraging and with the

quantity of existing requirement, take-up

should go well during the remainder of the

year.”

NEWS

Dominic Pozzoni