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Manchester Offices Briefing: Ken Bishop, JLL

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Ken Bishop, agency and development consultant at JLL, provides an update on the state of the offices market, and the opportunities and challenges facing the sector

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Manchester Offices Briefing: Ken Bishop, JLL

  1. 1. Manchester Development Overview 10th November 2016 Place North West Breakfast
  2. 2. Office Market in fine fettle despite………… 2 Source: JLL, Q3 2016 0 200 400 600 800 1,000 1,200 1,400 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 000s sq ft Take-up 10-Yr Average 6686,172
  3. 3. Headline Transactions • Swinton Insurance – 165,000 sq ft • Freshfields – 81,300 sq ft • Co-op Bank – 32,800 sq ft • Squire Patten Boggs – 28,000 sq ft • Kacoo Fashions – 25,650 sq ft Plus 2 transactions in Solicitors hands totalling 100,000 sq ft
  4. 4. One New Bailey Size: 125,000 sq ft Amount let: 81,300 sq ft 101 Embankment Size: 165,027 sq ft Amount let: 165,027 sq ft XYZ Size: 145,257 sq ft Amount let: 145,257 sq ft Developments Under Construction – PC 2016
  5. 5. Two St Peters Square Size: 161,113 sq ft Amount let: 121,500 sq ft 1 Spinningfields Size: 260,000 sq ft Amount let: 135,665 sq ft No 8 First Street Size: 143,610 sq ft Amount let: 39,610 sq ft Developments Under Construction – PC 2017
  6. 6. 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pre-Let Speculative Development Pipeline 2008 – 2019
  7. 7. Why no completions in 2018? • Funding, funding, funding • 8 schemes - only one funded by the private sector • Options – Local Authority underwrite; pre-let; forward funding • Constrains expansion and success of the City
  8. 8. Development Pipeline- completion 2019? 100 Embankment Tristan/Carillion Ask 160,000 sq ft Brazennose House, Lincoln Square M & G / CDP 106,700 sq ft 24 Mount Street FORE 80,000 sq ft 11 York St Kier 80,000 sq ft
  9. 9. Two New Bailey Square English Cities Fund 190,000 sq ft 2 & 3 Angel Square Hermes/Co-operative Group 2 - 145,224 sq ft 3 – 260,907 sq ft New Victoria Muse Developments 103,377 sq ft Development Pipeline
  10. 10. Site Owner: London & Continental Railways/ Manchester City Council/TFGM U & I appointed as Preferred Developer Scheme: A comprehensive redevelopment of 24 acres next to Piccadilly Station. The cost of the development estimated at circa £500m. The master plan comprises:  Commercial offices – 700,000 sq ft;  1,330 new homes (2 & 3 bed town houses and 1 & 2 bed residential apartments;  350 bed hotel;  Multi-storey car park; and  Six acre urban park • Mayfield Station
  11. 11. Developer: Allied London Scheme: Mixed use scheme on a 5.3 acre site of the former ITV Granada Studios. Planning The St John’s Strategic Regeneration Framework formally endorsed by MCC in February 2015 identifies a scheme with the potential to deliver:  2,500-3,000 townhouses, apartments, live-work units and high-rise living;  500-600,000 sq ft workspace;  80,000 sq ft of this a refurbishment of the Bonded Warehouse;  300-400,000 sq ft of new leisure;  Two new hotels; and  2-3 dedicated arts and culture buildings including the Factory St Johns
  12. 12. Union Bruntwood 66,249 sq ft PC Q2 2017 Dalton Place Tesco Pension Fund 65,724sq ft PC Q3 2017 11 Portland St Aviva 103,377 sq ft PC Q1 2017 Will refurbishments fill the gap in supply?
  13. 13. Arkwright House Catalyst Capital 105,000 sq ft PC Q3 2017 Heron House MCC/Bruntwood 109,000 sq ft PC ?? Hanover, Noma Hermes/Co-op 121,300 sq ft PC Q3 2018 Corner Block Credit Suisse 52, 000 sq ft PC Q2 2017 100 + 101 Barbirolli Square AEW + Moorfield/Oaktree 84,044 sq ft & 134,850 sq ft PC 2018? Depends on the building
  14. 14. Buy to let (2,387) PRS (2,416) Renaker (2,629) Owner Occupier (686) 8,118 apartments Residential reaching the heights Pipeline 24,000 apartments
  15. 15. Thoughts on the Future? • The b****y B word and Trump!! • Light at the end of the tunnel for major development sites • Where will the City Centre expand? • Impact of GPU requirement • The new paradigm with Mayor Burnham / Anstey and no SHB • Capitalising on the growing talent pool
  16. 16. Thank you Ken Bishop Development Consultant Manchester +44 (0)20 161 238 6275 ken.bishop@eu.jll.com COPYRIGHT © JONES LANG LASALLE IP, INC. 2015

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