When the first Covid-19 lockdown was imposed in the UK in March 2020, who could have imagined that almost a year later the effects of the pandemic on the office market would still remain unclear? With many corporate occupiers initially taking the position of 'wait and see', the market stalled throughout the UK as we collectively awaited the impact of what has been the biggest disruption to our personal and professional lives in a generation.

However, the first couple of months of 2021 have started to provide us with a small and early insight into some of the key trends starting to emerge within the North West market. Unlike other downturns, early indications across the region point to a flight to quality, not to budget, and with key schemes coming forward such as Circle Square, Barbirolli Square (pictured top) and The Lincoln, Manchester is well placed to meet this demand. This has already been evidenced this year through the setting of a new headline rent - £38.50 per sq ft at Barings' Landmark.

The rise in home working will mean that many occupiers will need to entice employees back to the office by providing a working environment that simply cannot be replicated at home through the provision of quality workspace, unrivalled amenity and enhanced wellbeing credentials. And while the sample size of active requirements in Manchester remains smaller than pre-pandemic levels, over 67 per cent of enquiries are from businesses seeking to upgrade their working environment. This all points to the indication that the flight to quality has truly taken off.

Another telling statistic at this early stage is the rising demand from occupiers for office buildings which provide some degree of flex. Evidence on the ground indicates most larger businesses are not seeking to move entirely to a flexible or serviced office model but do favour a solution that can provide them with conventional office space, as well as a flexible option within the building to allow them to flex up, or down, when required. Whether this be for specific project teams, town hall forums, drop-in meetings or agile working, the lure of this alternative space within a building is acting as an increasing draw for many occupiers.

These two factors of quality and flex help paint a picture of where we see the Manchester office market heading this year, as we hopefully progress out of the pandemic. Both themes not only have implications for the best buildings in the city, but also those at the budget end. Good secondary space always has an important role to play in offering value accommodation for cost-conscious or fledgling organisations. However, outdated spaces competing purely on price and lacking any degree of flexibility, may be the ones feeling the brunt as the market develops.

Further information

Contact James Evans

Contact Savills Manchester Booth Street

Attachments

  • Original document
  • Permalink

Disclaimer

Savills plc published this content on 26 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 February 2021 09:18:05 UTC.