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Copyright © 1998, MCB UP Limited
Manchester property market - Jones Lang Wootton
Manchester property market Jones Lang Wootton
Keywords Commercial property, Manchester
Manchester's commercial property market continues to flourish according to a report published today by Jones Lang Wootton, Manchester. Record take-up levels and new rental highs for both offices and retail clearly underline Manchester's status as one of the UK's premier business locations.
JLW's Manchester City Report studied activity in the city centre, South Manchester and Salford Quays, during 1997, reviewing performance in office, retail, investment and industrial sectors
Office take-up in the city centre, was the highest for a decade, with 82,800 sq.m. changing hands, more than double the figure for 1996. The report attributes delayed relocations in the wake of the bomb, rationalisation of operations and the realisation of several long-standing requirements as causes for the dramatic shift. Prospects for growth in prime city centre rents in 1998 are limited, with three major Grade A buildings, The Observatory, Norfolk House and The Chancery, fully available.
In South Manchester, the balance of demand changed dramatically, as the lack of major deals resulted in a lull in activity. Despite this, the report found new rental highs were achieved and prospects for rental growth during 1998 are good, as the expansion of Manchester Airport progresses.
Demand in Salford Quays remained positive but the area is undergoing a period of transition. Several major occupiers moved out and much of the take-up in 1997 resulted from expansion by existing companies in the area. However, investment in transport and infrastructure is expected to attract occupiers over the next two years.
Manchester continues to be the dominant retail centre in the North West, with 790,000 people regularly shopping in the city centre. Huge demand for prime retail shops from both upmarket and mass market retailers, saw new rental highs in 1997, as well as the conversion to retail use of some well located offices. Both Georgio Armani Collezioni and Angela Campbell Opticians are leasing units, recently converted from offices, on King Street.
As reconstruction within the city continues, retailers are positive about future trading prospects. The majority believe that with continuing redevelopment and investment within the city, the threat of out-of-town developments will be minimised. The Trafford Centre, however, continues to generate debate outside the city centre; its size and potential catchment area causing some concern in the suburban shopping locations.
In 1997, two large city centre leisure schemes, The Printworks and the Great Northern Warehouse, were granted planning consent and on completion look set to dominate the leisure market. The licensed retail market has also been active, a range of concepts opening in both traditional and developing leisure pitches.
Investment in the office market was moderate in 1997, with niche investors most active. The industrial and retail sectors were very active with landmark disposals including the Arndale Centre and Heywood Distribution Park. The biggest investment deal of the year was St Ann's House, a city centre building comprising five retail units with four floors of offices above.
Summarising, Andrew Shaw, Partner at Jones Lang Wootton, commented:
"Manchester's strategic importance to high profile occupiers is clearly highlighted in the City Report as city centre rents reach their highest levels ever and demand for retail space continues to increase.
"While 1997 was a quiet year for south Manchester, the rental highs achieved reflect the strength of the market. Planned speculative development for 1998 is a response to demand for premium office space outside of the city centre and a recognition by investors of the area's potential."