2015 for Salford Quays – which can also be called Media City – has been the best year for office lettings since records began. By the close of the year over 580,000 sq ft had been let. This is a quantum sea change for the former Manchester docks.
“In February, Bupa finally committed its Manchester future to Salford Quays signing a 142,000 sq ft pre let with Peel on the vacant site next to The Victoria. Having been one of the early pioneer occupiers in the area and since courted by the city centre mandarins to move back across Irwell, BUPA’s decision to remain in Salford Quays is a welcome fillip for the area.
“Next came the mighty Soapworks. The first truly speculative major scheme in Greater Manchester for many years, conceived in the dark days of recession and pursued the ‘he who dares, wins‘ philosophy.
“In the space of six months, Carlyle Group signed up 185,000 sq ft in three separate deals to UK Border Agency, TalkTalk Telecom Plc and US engineering consultancy, MWH Global. With a further 20,000 sq ft previously let to TalkTalk in 2014, only 25,000 sq ft of the current phase remains available at a quoting rent of £17.50 per sq ft plus cars.
“Exchange Quay has also joined the party. After a number of years of under-investment, it was bought in 2014 by Scottish asset manager, Hunter REIM. The new owner has ploughed in £10m with excellent results. With refurbished office accommodation, a remodelled public realm and new on site amenities, the offering is proving very attractive to tenants. In the year 86,000 sq ft has been let to the likes of Sage, Glaxo Smith Kline, Chase de Vere and North West Employers Federation, 3M , Beauty Bay and 1st Central Insurance. Further deals are in legals and there is a good pipeline of further interest.
“At MediaCityUK, Peel continues to hold out for higher headline rents at Orange where 80,000 sq ft remains available. Red Bee Media (part of Ericsson) have taken a floor in Orange and there is other interest.”
The take up in the market has enabled Peel to press ahead with their latest part office / part hotel building at MediaCityUK, futuristically called “Tomorrow” !
“At their ‘Metro’ scheme, BAM Properties has been another developer holding out for a headline rent of £21.50 per sq ft and they have been finally rewarded with a letting of a further floor of 18,000 sq ft to Hamburg Sud at this level.
“Media Village is also on a roll having let space in Magnetic House to Europa Worldwide Logistics and Solar Communications, Portwest Clothing and Interserve.”
So what’s in store for the next 12 months?
“EQ looks well placed to clean up! With c 180,000 sq ft still available to let in a wide range of unit sizes from 800 sq ft, up to a self contained building of 94,000 sq ft it could have things it’s own way until space at the Anchorage and Harbour City come back to the letting market in 2017/18 following Bupa’s relocation. These two schemes, plus further new build at MediaCityUK, will cater for demand moving into the 2020’s.”
“Rents in Salford Quays will rise. As rents in Manchester city centre continue to climb well above £30 this, together with the decline in supply in the Quays, will see average rents increase on grade A space (MediaCityUK apart) towards and possibly above the £20 per sq ft threshold which will still show a c 33 % discount on prime city centre rents only 1.5 miles down the road. Accordingly, there still looks to be plenty of headroom for further rental growth.
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