The document summarizes the state of the office market in North West England. It finds that commercial property investment volumes are set to increase 15% nationally by the end of the year, with investment in regional markets like North West England growing faster than in London. Transaction activity in the North West increased in the first half of 2014 compared to the second half of 2013. Manchester in particular is highlighted as a strong submarket, with high occupancy rates and several new large development projects underway that will add office space and investment opportunities in the coming years. Devolution of powers from London to regional authorities is also expected to further boost the North West economy and commercial real estate.

1. North West Offices – the state of the market
Michael Hawkins, National Offices, Colliers International

2. 2
What we’re going to cover
1. Introduction
2. National Markets Sentiment
3. NW Regional Overview
- Regional Revolution
- H1 Transactional Activity
- Who’s selling? / Who’s investing?
- Schemes to watch
4. Spotlight on Manchester
5. Close

3. 3
The National Picture
 Commercial property
investment volumes UK-wide
set to reach £60bn before year
end – 15% up on 2013
 The proportion of investment in
London shrinks as investment
in the regions grow
 Investment volumes outside of
London (YTD) have already
surpassed the full year total for
2013

4. 4
NW Regional Opportunity
2015: The Year of the
Regional Revolution
Devolution of powers from
Westminster will impact greatly on
the NW region as a key driver of
the ‘Northern Powerhouse’
economy.

5. 5
North West H1 Transactional Activity
 Transactional activity up on H2 2013
 800,000 sq ft of space let or sold in H1 2014
 Vacancy rates just under 18.6% in H1 2014 (MCR at 14.4% and
Liverpool at 17.6%)
25.0%
22.5%
20.0%
17.5%
15.0%
12.5%
10.0%
% Vacancy Rate
North West Manchester Liverpool

6. 6
Manchester City Centre – Our Playground
• 19 Million sq ft of
existing Offices
• £70 Billion Capital
Value
• £266 Million annual
rent
• 8 Million sq ft of
Offices to come
• £35 Billion Capital
Value
• £220 Million annual
rent
• Investment fees of
£350 million
• Leasing fees of
£16.5 million

7. 7
Manchester Snapshot
SUPPLY
 Total office stock 19.00m sq ft
 Vacancy 2.7m sq ft (14.2%)
 “Genuine” vacancy 1.2m sq ft (6.3%)
 Total Grade A office stock – 4.5m sq ft
 New build prime CBD vacancy – 335k sq ft (8%)
TAKE UP
 H1 total take up of 801,513 sq ft (same level as 2013
as a whole)
 10 year average is 880,000 sq ft
 2010 a record year 1,325,000 sq ft
 Take up analysis of 2011 (700,000 sq ft) 2012
(790,000 sq ft) and 2013 (880,000 sq ft)
 Significant deals for Q2 include: Ford Credit at First
Street; Slater & Gordon at 58 Mosley Street;
Towergate Insurance at 3 Hardman St; Economic
Solutions at Churchgate & Leigh House
DEMAND
 2.0m sq ft of 30k sq ft + lease expiries 2014 – 2017
 Key current requirements: Addleshaws, Bupa, DLA
Piper, Ernst & Young, Gazprom, Shoosmiths, Squire
Patton Boggs and Weightmans
TYPICAL YIELDS:
Yield %
Prime 4.5% - 5.75%
Secondary 6.5% - 8.0%
TYPICAL HEADLINE RENTS:
Typical Headline Rents Rent
Prime CBD new build £30.00 - £32.00 per sq ft
Fringe new build £25.00 per sq ft
Prime CBD refurbished £20.00 - £25.00 per sq ft
Fringe refurbished £15.00 - £19.50 per sq ft
Term Certain Grade A
New Build
Grade A
Refurbished
5 years Not available 15 - 18 months
rent free
10 years 24 – 30 months rent
free
30 – 36 months
rent free
TYPICAL INCENTIVES:

8. 8
Manchester Snapshot
Schroders’
acquisition of
City Tower –
May 2014

9. NW Developer / Landowners – Key Players
Historic Key Players - Developers
Future Key Players – Next 5 Years - Developers

10. 10
NW Investment – Key Players
Traditional Investors
New Investors

11. 11
Key Schemes - Indicative
Noma
- 4 million sq ft
- Mixed-use scheme
St Peter’s Square
- New business district
- Landmark / London
Scottish / 3 St Peters /
Peter House
ITV Granada site
- 13-acre
- Residential-led
mixed-use
development
Embankment
- First phase 101
Embankment
- 167,000 sq ft Grade
A office development

12. 12
Schemes to watch - Manchester
Landmark
- 178,000 sq ft
- Hines/Manchester
3 St Peter’s Square
- 110,000 sq ft
- CIS c/o AXA Real
Estate
Cotton Building
- 340,000 sq ft /
240,000 sq ft
- Allied London
Astley & Byrom House
- 250,000 sq ft
- CBREGI
11 York Street
- 85,000 sq ft
- Aberdeen & Rank Xerox
Pension Fund
Brazennose House
- 150,000 sq ft
- M&G

13. 13
Looking Ahead
What does the future look like for the NW Region?
 Investment volumes will cruise towards a full year total of £60bn (15%
up on 2013’s £52bn)
 Devolution of power to the regions

14. North West-based – National Influence
Michael Hawkins
Director
Head of NW Offices
1010%% 9900%
Nick Nelson
Associate Director
NW Offices
Peter Gallagher
Director
NW Offices
Scott Shufflebottom
Graduate
NW Offices
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