Booming Manchester needs extra 3 million sq ft of office space to cope with demand

It comes as real estate advisor Savills predicted that the number of office workers based in Greater Manchester is set to grow by around 36,000 by 2025.

Booming Manchester needs an additional 3 million sq ft of office space over the next decade.

That's according to international real estate advisor Savills, which published findings from its latest research today.

The report said that the number of office workers based in Greater Manchester is set to grow by around 36,000 by 2025.

It comes, Savills say, as more companies look north to grow their presence.

Over the next three years around 1m sq ft of new office space is set to be delivered, with a further 500,000 sq ft of refurbished space in existing buildings planned.

This however leaves a deficit of approximately 3m sq ft between supply and demand.

At the same time, the resident population of Manchester is forecast to rise by 65,500 over the next 10 years, requiring some 9,650 new homes a year.

Current delivery is falling some 5,100 below this need, according to Savills.

James Evans, Director, Office Agency in Savills Manchester office, added: “Manchester continues to boom with relatively affordable living and commercial space stimulating continued demand for offices from indigenous, north-shoring and inward-investing businesses.

"While this is good news for landlords, investors and developers, if we fail to keep pace with demand the city’s ongoing growth prospects could be jeopardised, with businesses relocating or looking elsewhere if they can’t find space that fits their requirements.

"The planning process needs to carefully balance the need for more offices against the equally pressing requirement to deliver more homes, as these new employees will need somewhere to live as well as work.”

Savills forecasts that most new commercial space is likely to be delivered around the existing cores of Spinningfields and Piccadilly, but with prime office rents in these locations predicted to rise from £33 per sq ft to £37 per sq ft by 2019, existing occupiers may begin to find these areas unaffordable.

MediaCityUK and Salford Quays, the Salford/Irwell corridor, Southern Gateway and south Manchester’s business parks all have the potential to deliver more affordable accommodation for cost-conscious occupiers, according to the research, but with current levels of availability there is likely to be a shortage of mid-priced refurbished office space suitable for TMT and SME companies which will not be filled by the major developments in the pipeline.

Mat Oakley, Director and Head of European Commercial Research at Savills, said: “Manchester’s underlying strengths and well-established education, financial and business services sectors have already served to create 57,000 more jobs in the city since 2011, and with more companies now looking at the city as a potential location to ‘north-shore’ demand for office space is heading in only one direction.”

Source: http://www.manchestereveningnews.co.uk/business/property/booming-manchester-needs-extra-3-10565702

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