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Kal Vaughan
Kal Vaughan
  • 1 Minute Read
  • 21st November 2012

Manchester's commercial market at tipping point

Manchester could be facing an under supply of built Grade A office space in as early as Q3 2013 if prevailing absorption rates continue.

The supply of Grade A office in the city centre has steadily fallen from 1.3m sq ft in Q3 2008 to its present level of just 402,000 sq ft.

A report from commercial property investment company GVA titled “tipping point” shows that available Grade A office space in the city is already at a point of undersupply.

“With no other schemes anticipated to start on site in the foreseeable future without significant or entire pre-commitment it is clear that the market has a finite level of supply.

“In the case of the prime core, which has traditionally been favoured by professional occupiers we are already at a point of undersupply,” said the GVA.

The shortage has resulted in a depression in its commercial property market investment which is down by almost £100m from last year.

Capture2Experts have said there is keen interest from investors in the region but historically low property prices have made vendors reluctant to sell their properties.

There are now only five buildings in the centre which have available space of over 10,000 sq ft.

The GVA warned if the current rate of office space take-up continues businesses could be forced to sign pre-let deals with developers.

Chris Cheap, director at GVA Manchester, said: "Manchester’s ‘brand’ on a regional, national and international stage has never been stronger; the demographic back story is compelling for financial services and professional sector organisations.

Based on our research, we believe we could be facing a position of under supply by the third quarter of 2013 as the remaining stock, for varying reasons, may not directly suit the particular requirements of those companies seeking space."