City spotlight: Manchester gets flexible as serviced offices make their mark

Serviced office demand in the UK regional markets have seen unprecedented requirement levels with take up outside of London set to reach 500,000 sq ft in 2018, a 14 per cent increase on 2017, according to Savills research. Manchester has been one of the cities that has so far seen the greatest levels of growth in terms of serviced office take up accounting for 26 per cent of the overall regional figures last year, boosted in particular by the growing number of better quality flexible office stock in the city.

We have already seen WeWork choose Manchester for its first acquisition outside of London last year when it took 55,000 sq ft at 1 Spinningfields. WeWork has also taken further space in the city at One St Peter’s Square where it will occupy 44,000 sq ft. In addition to WeWork, Manchester has also proved popular with other London based providers such as Work.life and OurSpace, both taking space over the last year. There are also several thriving independent providers such as Beehive Lofts and The Offices. As well as the new entrants, the incumbent providers are not sitting still, in the past year Bruntwood has launched its impressive new space Neo on Charlotte Street.

This commitment to Manchester by serviced office providers combined with the growth in demand from occupiers for flexible space is testament to the city’s growing reputation as a centre for innovation, media and technology with the region seeing almost 8,000 new businesses starting up in 2016. Furthermore, the opening of Mi-IDEA and the Si Henry Royce Institute for Advanced Materials in 2019, will provide greater opportunities to support the retention of talent and cultivate start-up and incubator businesses across the city.

Manchester’s tech infrastructure has also matured over recent years with Savills research reporting that the city’s office market has seen more TMT take-up over the last 17 years than any other regional market and this dominance is expected to continue.

In addition, we have witnessed a considerable portion of demand for Manchester coming from London based businesses as they begin thinking about expanding their business beyond the capital, with over 20 per cent of searches for the City coming from London.

In terms of cost for serviced office space, average desk prices in Manchester at the cheaper end of the market range between £250 and £350 per desk per month for private office space, and at the more expensive end they rise to £450+ per desk per month.

Whilst the serviced office provision in the city has expanded, it is vital that it continues to grow and adapt to the changing nature of the diverse variety of businesses that occupy this type of space with a greater focus on flexibility, amenities and affordability.