Offices to Let Market in Manchester: 2023 Analysis and 2024 Predictions

2023 Analysis

The Manchester office market experienced a mixed year in 2023, with strong demand for Grade A space but a softening of rents in some sub-markets. The overall vacancy rate fell to 7.8%, its lowest level since 2007, while take-up reached 2.8 million sq ft, the highest since 2018.

Key factors influencing the market:
• Rising employee expectations: Employees are increasingly demanding more flexible and attractive workspaces, which is driving demand for premium office space.
• Tech sector growth: Manchester's tech sector is booming, attracting new businesses and expanding existing ones. This is putting upward pressure on demand for office space, particularly in areas with strong tech clusters.
• Increased hybrid working: The pandemic has led to a shift towards hybrid working, where employees split their time between the office and home. This is reducing demand for large, centralized offices and increasing demand for smaller, more flexible spaces.

Rents:
• Grade A: Rents for Grade A space remained stable in 2023, with an average asking rent of £27.50 per sq ft. However, there was some softening in rents for smaller spaces in the city centre.
• Grade B: Rents for Grade B space fell by an average of 2.5% in 2023, driven by an increase in supply and softening demand. The average asking rent for Grade B space was £18.50 per sq ft.

Take-up:
• Total take-up: Total take-up reached 2.8 million sq ft in 2023, the highest since 2018. This was driven by strong demand from tech companies, financial services firms, and professional services providers.
• Sub-market take-up: The strongest sub-markets for take-up in 2023 were the Northern Quarter and Ancoats, with both areas benefiting from their strong tech clusters.

2024 Predictions

The Manchester office market is expected to remain stable in 2024, with continued demand for premium office space and some softening of rents in secondary sub-markets.

The following factors are expected to influence the market:

• The continued growth of the tech sector: The tech sector is expected to remain a key driver of demand for office space in Manchester. This is likely to lead to further development of tech hubs and an increase in demand for Grade A space.
• The impact of hybrid working: Hybrid working is likely to continue to have an impact on office space requirements, with some companies downsizing their office space and others looking for more flexible layouts.
• The wider economic outlook: The wider economic outlook will also play a role in determining the performance of the Manchester office market. A strong economy is likely to support continued demand for office space, while a weak economy could lead to increased vacancy rates and falling rents.

Overall, the Manchester office market is expected to remain resilient in 2024. The city's strong economic fundamentals, coupled with its growing tech sector and attractive workspaces, are likely to attract new businesses and drive continued demand for office space.

 

Death of the office workspace?

As everyone knows, the coronavirus pandemic has drastically changed the way we all work, prompting businesses to become increasingly agile and footloose – a change in company culture and working norms that would have seemed simply unimaginable just a year ago.

Have you had to deal with people working from home, answering the phone and you can tell they are still in bed, or have the 2 year old screaming behind them?  It’s just off putting and unprofessional. I called my bank regarding a serious fraud alert on my account back in September, the ‘at home’ assistant clearly still eating her breakfast, and the dog didn’t stop barking in the background.

Never has it been so difficult to distinguish between home and work, people are finding this is having a serious impact on their mental health and emotional wellbeing. Being behind the same four walls all day long is not productive or advantageous to the employers or the employee. Not everyone has office space at home and often find themselves perched at the end of the bed trying to remain professional. To be productive in work, the employee needs support, colleagues, and the ability to separate their home and work life.

While some people think this may well be the ‘death of the office workspace’, I believe them to be entirely wrong.  Working at home, the efficiency, lack of development opportunities and the wellbeing of staff whilst the children are tugging on their dressing gowns, has continued to show its lack of value.  With the addition of the UK’s Brexit from the EU, this creates a long-term harm for the UK’s commercial sector.

I strongly believe, parts of the UK such as Manchester, will continue to have a booming market for the office workspace, but the key to its success will be the flexibility and innovation, that these workspaces can offer.  Turner Business Centre offers just that.

 

Flexible workspace

The flexible workspace market has grown significantly in recent years. Turner Business Centre is just one of almost 6,000 flexible workspace centres in the UK, accounting for as much as 17% of global supply.

So whilst the coronavirus pandemic has created undeniable challenges for the commercial, property and office building sectors, our flexible space within Turner Business Centre is filling up nicely and primed to succeed as businesses want a greater flexibility in their office footprint.

Similarly, the Covid 19 outbreak has shown the importance for employees of being able to access office space on a more flexible basis. Many people have benefitted from reduced commuting from city centre Manchester, to us here on the outskirts of Manchester, in Middleton, but the impacts of continued home working are really starting to give serious cause for concern.

A recent survey found that 29% of respondents lacked appropriate equipment to even enable them to work from home; while 37% report being unable to unplug from work in their home environment, working even more unsociable hours after the kids had gone to bed?

Clearly, the office still plays such a crucial part in offering opportunities for businesses and people to recover from the pandemic. The value of this remains unchanged by Brexit, but especially where the pandemic allows people to work in a more uncommitted and remote way.

 

Stay Ahead of the contest

To remain ahead post-Brexit, the UK office market must continue to innovate its product and service offering.  We provide a range of amenities all under one roof – from flexible workspace to a single office space, to a ‘room with a view’ for 10 people.  We offer a very friendly and courteous Reception area, complete with flowers and nice smelling candle when you enter!

The office has to also play a crucial role in meeting the needs of the next generation of workers that are coming through, offering the face to face and in person development opportunities, that they have sorely missed when working from home.

While Brexit continues to create a sense of uncertainty, the pandemic has also shown the enduring relevance and value of the office space to work in.

The City of Manchester, now with its growing, ever increasing city skyline, very quickly catching up to and rivalling the capital, holding its own horizon under the Manchester flag. I am very proud of my city, it remains an attractive place to work, eat, drink and sleep and its office space is a place where businesses can thrive.

The flexible workspace within Turner Business Centre and the serviced office sector still has everything to play for.