Gary Neville’s £400m landmark development in Manchester dominated the city’s office market in 2023, in the same way it will soon do with its skyline.
The St Michael’s scheme is being completed over two phases and will feature office space, a hotel and luxury apartments.
When complete, the £150m No 1 St Michael’s will comprise nine floors of office space while global restaurant brand Chotto Matte will occupy the rooftop with two food and beverage outlets situated on the ground floor.
The £250m phase two is a 41-storey tower which will be home to a 162-bed, five-star W Hotel as well as 217 residences and an additional 75,000 sq ft of office space.
As well as Neville’s Relentless Developments, the scheme is being brought forward by US investment giant KKR and Salboy, the Salford developer co-founder by Fred Done, of Betfred fame. Manchester City Council is also a key stakeholder.
Gary Neville
When it was launched to the market last year, it was announced that Pinsent Masons and Hill Dickinson had signed major deals to take space in 1 St Michaels when it is completed in August this year.
Pinsent Mason’s £43 per sq ft deal became the new record headline office rent in the city.
Now, new figures have revealed how the St Michaels scheme, and others, are impacting Manchester’s office market.
The data has been release by MOAF (Manchester Office Agents Forum) whose members include Avison Young, BE Group, CBRE, Colliers , Canning O’Neill, Cushman & Wakefield, Edwards & Co, Hallams Property Consultants, JLL, Knight Frank, LSH, Matthews & Goodman, OBI, Savills, TSG Property Consultants, and Sixteen.
MAOF has reported that 946,230 sq ft of office space was let across 221 transactions during 2023.
A CGI of the St Michaels scheme in Manchester city centre.
However, the final outturn was lower than the 5- and 10-year average figures due to a lack of a big transaction in the year.
The 10 largest transactions completed in 2023 totalled 254,566 sq ft compared to 408,921 sq ft in 2022.
But MOAF is predicting strong take-up in 2024, with a number of “high-profile, large transactions” due to complete in the first half of the year.
Other notable transactions concluded in 2023, including Arden University acquiring 42,944 sq ft at 2 Hardman Street and Matillion acquiring 27,056 sq ft at 2 New Bailey Square.
The managed workspace market remained active, Cubo, Manchester’s latest entrant to this market, acquired of 30,829 sq ft at M&G’s new development, the Lincoln.
Eden secured the largest occupier in Q4, where BDO committed to 23,017 sq ft in English Cities Fund (ECF) sustainable new development.
‘We expect a strong start to the year’
Rob Yates, head of office agency at Cushman & Wakefield and MOAF chairman, said: “Manchester’s office market continued to perform robustly despite the global uncertainty and a diminishing lack of readily available grade A supply.
“As we move in to 2024, with a supply of new developments delivering high quality office space to the market, we expect a strong start to the year with a number of high-profile transactions in the pipeline.”
Outside the city centre, Salford Quays and Old Trafford saw 72 transactions totalling 218,199 sq ft.
Meanwhile, South Manchester saw 251 transactions, totalling 547,195 sq ft. The largest transactions being the letting of the Lakehouse, Cheadle Royal, 37,130 sq ft to Seda Pharma Developments.
Other notable transactions included Hurst Accountants talking 11,248 sq ft at the recently completed, new development, 3 Stockport Exchange.
Adam Robson of Lambert Smith Hampton added: “In totality, the out-of-town markets MOAF monitor, South Manchester, Salford Quays and Warrington transacted a total of 1,054,673 sq ft in 323 transactions demonstrating the vast extent and depth of the Greater Manchester office market.”