Manchester Snapshot, July 2012

Report Summary:

Over the past five years Manchester has seen strong positive absorption of Grade A space. However, evidence in 2012 to date suggests that further absorption of refurbished space is being diluted by release of poorer quality Grade B offering, raising overall vacancy rates. In H1 2012 311,024 sq ft was transacted, with Grade A transactions accounting for around 19% of that figure. This compares to 35% in H2 2011 and 30% in 2011 as a whole.

With take-up below trend, Q2 2012 saw a modest rise in overall availability, the first since mid-2009. This rise was entirely due to an increase in Grade B non-refurbished product, which has risen by 16% half year on half year and now accounts for 27% of total availability compared to just over 22% at the end of 2008. Overall vacancy in the city core currently stands at 16.8%, a modest rise quarter on quarter. Residential developers are beginning to revisit potential schemes in the city centre.

Grade A space shortages look set to continue as funding constraints have served to put a brake on new development and the recycling of older and redundant stock. If such shortages in established and oversubscribed CBD locations persist, it may help to push occupiers toward more innovative occupational solutions, which will involve relocation outside the CBD and hence reinvigoration of less fashionable and undervalued peripheral locations.

About the Author:

The Colliers International Research team provide expert advice and a wide range of specialist services to clients across the UK, including a property market forecasting capability.

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