Demand for office space in Manchester reaches high levels and expected to continue
The demand for property in Manchester remains strong as more property investors are pouring money into the city which includes a large number are multinationals based abroad. The introduction of property investors from across the world is proving to be great for those looking for business, commercial and office properties in the city, but it is also a fact that the local real estate agents are having a tough time because of the level and intensity of competition resulting because of the influx of multinationals in the sector.
Investors are pouring in hundreds of millions of pounds in properties across Manchester. The city is has seen an increasing number of deals being signed and takeovers in recent times. Requirement is especially high for office space in the city which is reflected in high rentals. It has been felt in recent times that the city offers a safer option to invest in real estate compared with London.
One such firm which is investing in the city is M&G, which is investing in the city in a big way. It has invested more than £27bn across the UK, Europe, America and East Asia. At present, the company is diversifying its funds and investing in buying and building. The head of business space at M&G, Chris Perkins, said there are a number of reasons to invest in the city. According to Perkins, Manchester is better than London because of lesser volatility and smooths the company’s large portfolio exposure across the UK. The company recently acquired Ask’s 101 Embankment in Greengate for £105m and owns 50 Fountain Street, 1 Hardman Boulevard and 3 Hardman Square in the city.
Earlier, planning permission was granted for the 92,000 sq. ft. Brazennose House in 2016. Perkins said the investor was looking for assets which provided opportunities for rental growth, which he is confident about. He said, with rents around £35/sq. ft., the city is sustainable and predicts that Brazennose will command that level when it completes in two years. He said that M&G is prepared to start work on the site at Brazennose in Lincoln Square. Perkins said that a number of the company’s pension funds are focussed on real estate concerning office developments and that it is looking for high quality, Grad A stock with long term resilience and sustainability for the purpose.
Associate director of asset management at M&G, Sam Jones, is also confident regarding the performance of real estate in the city. He predicts a sustained growth in the sector in the long term. Jones foresees resilient period for investors looking to invest in office real estate. He says that quality products at premium locations are set to perform. Referring to M&G’s assets around Spinningfields, he said that products with a strong F&B will continue to have their appeal in years to come.