MOAF: Office take up exceeds 300,000 sq ft in Q1
A total of 58 office lettings equating to 306,000 sq ft were signed in the first three months of 2020, but Covid-19 is expected to take a toll on deals in the months ahead, the latest figures from the Manchester Office Agents Forum show.
It was the third consecutive year the volume of lettings has risen in Q1, according to MOAF.
The biggest deal of the quarter was technology firm Hilti's deal to lease 42,500 sq ft at Bruntwood SciTech's Circle Square, forming a chunk of the total 67,300 sq ft taken at Circle Square during the quarter. The other leasing deals at the property were Northcoders, HPE and Accenture.
Other notable lettings included two at Windmill Green on Mount Street with CBRE's flexible office provider Hana and IT company OneStream, in deals totalling 37,000 sq ft, while BET365 took 25,000 sq ft at the Core on Brown Street.
Another IT firm, Sopra Steria, took 17,000 sq ft at M&G's Arndale Tower, which is now fully let after insurance firm Markerstudy took a further 41,000 sq ft in addition to the 35,500 sq ft it agreed in the final quarter of 2019.
Salford Quays and Old Trafford saw increased office letting activity compared to the same period last year, according to MOAF's figures, with 112,000 sq ft let across 19 deals, the largest of which was for energy solutions firm, BES which took 21,400 sq ft at Peel's Adamson House.
A further four deals totalled 10,000 sq ft including Her Majesty's Courts & Tribunals Service, which will move into Picton Property's Metro at Salford Quays after signing to take 17,700 sq ft on a 20-year lease.
Meanwhile, US pallet supplier Chep has finalised a deal to take space at Think Park while Bibby Financial and QA Consulting both plumped for five-figure lettings at The Anchorage.
In South Manchester, office take-up in the first quarter totalled 105,881 sq ft across 32 separate deals, the largest being Place First's acquisition of 123 Clarence Road in Longsight, the former post office, at 20,387 sq ft.
Nick Nelson, director at Sixteen, one of MOAF's 15 member firms, said he anticipated deals for which negotiations are already in motion to complete without problems despite the coronavirus crisis.
However, he predicted that, due to the current climate and "time away from the market", there would be a drop in the number of smaller deals, those less than 5,000 sq ft, which often "prop up" the quarterly figures due to the speed at which they can be completed.
He urged occupiers to seek support from the Government in terms of rent holidays, deferments or monthly payment plans.
"There has been an inevitable handbrake on new activity, which will stay until there is a return to a semblance of normality," he said. "It is, however, positive to note that the majority of leasehold deals that were close to transacting are still moving along in the background.
"It is understandable that companies both small and large are concentrating on more pressing issues such as cashflow and staff retention, rather than property initiatives."
Richard Wharton, director at consultancy JLL, said: "Although there may be challenging times ahead, we believe the underlying demand from major corporate occupiers looking to expand and relocate into the city will remain strong.
"When we return to normality, we expect that delivery of new-build and refurbished schemes will continue apace."
MOAF also anticipates that average rental values will exceed £40/sq ft once the market returns to normal.