We understand that Manchester’s highest ever office rent is about to be set at £45 per square foot making the city the most expensive city centre location outside central London.
The previous record rent for Manchester’s office market was set in January 2021 when Grant Thornton signed a lease on 13,000 square feet at Landmark at a headline rent of £38.50 per square foot.
But that record is about to be surpassed by a letting of a 1,862 square foot penthouse suite at Chancery Place on Brown Street in the heart of the city’s traditional business district. The new rent is 17% higher than the previous record.
The suite (pictured above) was originally planned to be a communal business lounge with shared meeting rooms and a large roof terrace. However, due to exceptionally keen tenant interest, the landlord has apparently decided instead to let the space. It is understood to be under offer at a headline rent of £45.00 per square foot, which would make it Manchester’s most expensive office space by some margin.
The suite will include around one third of the roof terrace with the remainder still being dedicated to communal use.
This letting may not yet be totally representative of the local market as awhole due to its relatively small size and unique characteristics (i.e. that amazing view). However, it does prove that some tenants are willing to pay a substantial premium for space that has a “wow” factor.
Worryingly for tenants though is the risk that such a deal could cause a ripple effect by raising the rental aspirations of other landlords in the city centre market. With cost inflation already at record levels, this is not what businesses need right now.
Of course, hybrid working means companies can reduce their office footprint. This is resulting in tenants seeking smaller but higher quality space. This in turn is creating a two-tier market where record rents are being achieved in the best quality new buildings in spite of overall office supply going up.
On the flipside, we are seeing an increasing number of larger floorplates coming to the market. These are often still leased to the original corporate tenant. This 'Tenant Space' as we refer to it, is ideal if you want to minimise your upfront capex on fit-out and your on-going fixed costs. In many cases, the rent will have been set several years ago which means it could now be well below the current market level. Also, the quality of the fit-outs in these suites is usually pretty high so the cost of relocation can sometimes be significantly lower than you might expect.
If you would like to learn more about ‘Tenant Space’ or offices that have that ‘wow factor’, please call Martyn Markland on 0161 457 1422 or email him at mm@tenantag.co.uk