Manchester Office Market Report

Manchester Office Market Report
 
Investment Market in Manchester

15 September 2015, by Mat Oakley

Investor demand for assets in Manchester remains strong.

 

■  Over the last two years the regional property markets have seen a significant increase in investor interest. This has been driven by two factors: firstly reducing risk aversion amongst investors post the global financial crisis; and secondly a desire to capture the economic and leasing market recovery that is rippling away from London.

GRAPH 3

Comparative prime office yields: Manchester & London

 
Graph 3

Source: Savills Research

■  Over the last two years the regional property markets have seen a significant increase in investor interest. This has been driven by two factors: firstly reducing risk aversion amongst investors post the global financial crisis; and secondly a desire to capture the economic and leasing market recovery that is rippling away from London.

■  57% of all UK commercial property investment purchases in the first half of 2015 were outside London, and 43% of these purchases were by non-domestic investors.

■  Over the course of 2014, UK institutions dominated the Manchester investment market, compared to 2013 where the bulk of demand was from overseas investment.

■  The first half of 2015 has already seen £298m of office investment transactional activity in Manchester, which while it is down on the same period in 2014, is higher than the average full year total for the preceding six years.

■  We estimate that the prime CBD office yield has remained stable at 4.75% over the first half of 2015. However, there is clearly downward pressure on this, with investor demand for the City remaining strong.

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