Manchester, the UK's second-largest city, is an undeniable hive of business activity. But for those seeking office space in this vibrant hub, understanding the cost landscape in 2024 can feel like navigating a labyrinth.
Understanding the cost of office space in Manchester can help businesses determine whether this thriving city could become a potential base for their operations. The Manchester office market offers dynamic spaces and is a compelling proposition for both tenants and landlords. Recent data unveils a surge in demand for high-quality space, painting a vivid picture of a market poised for sustained growth and transformation.
How much does Manchester office space cost?
The current state of office space costs in Manchester
Current quarter take-up figures speak volumes, reaching a robust 351,000 sq ft – a significant 20% leap over the ten-year average. Notably, transactions involving Prime and Grade A space take centre stage, accounting for 52% of total activity and totalling 184,000 sq ft. This trend underscores a heightened appetite for exceptional environments that not only empower productivity but also foster employee wellbeing.
Scarcity fuels the fire
This fervent pursuit of premium office space in Manchester is further intensified by its limited availability. At the end of 2023, Grade A stock dwindled to a mere 2.5%, highlighting the critical supply-demand imbalance driving market momentum. While overall vacancy ticked up slightly to 11.5%, this primarily reflects adjustments within lower tiers as top-tier assets remain highly sought-after.
Manchester’s consistent trajectory
This preference for superior spaces isn't a recent phenomenon. Over the past few years, Grade A take-up has consistently led the charge in Manchester's office market, signifying a well-established and sustained trend.
The future looks optimistic for Manchester's commercial landscape. Prime rents already witnessed a 7.5% surge in the last quarter, and forecasts predict a further 8% growth, culminating in £46.50 per sq ft by 2027.
The flight to quality takes off
As tenants prioritise prime locations and exceptional environments, the "flight to quality" movement shows no signs of slowing. Expect rental rates for premium spaces to steadily climb, while lower-tier offerings may face dwindling demand. This scenario is further bolstered by exciting development projects – 923,000 sq ft of prime space is currently under construction for delivery by 2025, with a remarkable 68% already pre-let.
While location continues to hold weight, current trends reveal that the quality of space has emerged as a paramount decision-making factor. While the cost of a Manchester office remains a crucial consideration, businesses are unwilling to compromise on features that foster employee wellbeing, collaboration, and innovation.
Manchester Office Rents - A Breakdown
Price breakdown by area for Grade A and Grade B Manchester Office Space
Grade A categorised offices are new or recently developed office buildings. They are finished to a very high standard in order to compete for premier office users. Grade A Offices will contain raised floors, suspended ceilings, and a new HVAC system.
Grade B categorised offices are buildings that are finished to a good or fair standard; functional materials are used. Typically Grade B offices will contain adequate facilities but lack the additional facilities and added features of their premium Grade A counterparts.
Grade A Costs - per sq ft
Grade B Costs - per sq ft
Ancoats and Northern Quarter
£26 - £32
£20 - £26
£33 - £43
£26 - £32
£23 - £28
£17 - £26
£23 - £26
£32 - £34
£22 - £32
£24 - £27
£16 - £22
£33 - £47
Additional factors affecting Manchester office rents
Naturally, larger office spaces attract higher rents compared to their smaller counterparts. However, keep an eye out for potential savings offered by flexible office providers, who may tailor packages to your specific needs.
Hidden gems with big price tags
Beyond these core factors, some unexpected factors may influence cost. Historical buildings, for example, may offer character and charm at a premium, while modern builds often boast energy-efficient features that could translate to long-term cost savings. Additionally, access to public transport, proximity to amenities, and parking availability can all play a role in shaping the final price tag.
Beyond the numbers: more than just rent
Remember, your office space cost encompasses more than just the monthly rent. Factor in service charges, which cover building maintenance and common areas, as well as potential costs for utilities, equipment, and furniture.
Negotiation: the art of the deal
Don't be afraid to negotiate! Manchester's market is dynamic, and landlords may be willing to offer competitive deals, especially for longer-term leases.
Area - here to help you find your perfect Manchester office
With a nuanced understanding of the Manchester market and its intricacies, Area's regional workplace experts are poised to guide you. Whether you're a tenant seeking the perfect environment to fuel your business or a landlord navigating the evolving landscape, we offer expert insights and bespoke solutions to ensure your success.