8 July, 2008 – Economic downturn will not affect Manchester commercial property market
Property experts Lambert Smith Hampton claim that Manchester's office developments will not remain empty even if the economy goes into a recession, according to their first national office sector reserach report.
Findings of the report conclude that Manchester’s economy and particularly its commercial property market is strong enough to cope in increasingly negative economic times.
The current downturn in the economy is likely to impact on occupier-demand, increasing the risk of oversupply, according to Lambert Smith Hampton’s first national office sector research report.
The firm, based at Mosley Street, says that Manchester is one of the five regional centres, along with Leeds, Glasgow, Birmingham and Bristol, which will see the greatest increase in new speculatively-built office space coming on to the market this year. Between them the five cities account for half of the total amount of new office space built in the UK this year.
However, the report does not predict a return to the 1990s when a glut of newly-built office blocks stood empty for years. They say that the government’s decision to abolish rates relief for empty buildings will persuade developers to call a halt to building projects with poorer chances of finding occupiers.
Peter Skelton, head of LSH Manchester, said: "Take-up of offices in Manchester city centre last year was the second highest on record and figures for the first quarter of 2008 were very healthy, in excess of 250,000 sq ft. There are a number of sizeable requirements circulating in Manchester at the moment and we believe the commercial property market here looks set for another good year.
"One of the secrets to Manchester’s success is the wide diversity of choice on offer, which benefits the whole of the city. Even in the current economic downturn, there is no doubt there are still areas of opportunity for developers and investors alike."
Chris Lloyd, office agency specialist at surveyors DTZ in Manchester, agrees. He said: "Whilst it cannot be denied that there is a spike in supply for 2008, the good news is that there are occupiers in the market. Demand is coming from both existing occupiers and inward investors. Manchester is full of good news at present and is benefiting from positive headlines such as the BBC’s relocation and the Bank of New York looking to expand.
"The confidence gained in Manchester over the last 10 years has created such a momentum that it is very well placed to fend off the problems caused by the credit crunch. Quality schemes, such as Spinningfields and Universal Square, will continue to prosper this year."
Source: Manchester Evening News