Backing Birchwood

Cantt Pak has added to its holdings in Birchwood Park, Warrington by buying Washington House and Allday House advised by Pin Property Consultancy, whose MD, Nasira Majid, won Woman in Property and Outstanding Business Woman of the Year awards at the first North West & Isle of Man Women in Business Awards.

The two buildings total 9,755 sq.metres (105,000 sq.ft.) with Washington House occupied by URS, an engineering consultancy, while Allday House is empty. Imran Younus of Pin said: “We will soon announce details of the refurbishment programme that will totally transform Allday House. We have already had interest from potential occupiers.” DTZ acted on the acquisition. Also in Warrington, Allen & Appleyard has taken the 1,505 sq.metres (16,196 sq.ft.) Unit 3, Taurus Park, Europa Boulevard.

Pannone in the market

Yet another major Manchester based law firm is seeking a large new headquarters in the city. Pannone wants to move out of its Deansgate building by the spring of 2014 and is using p3 to find a site of 8,826 sq.metres (95,000 sq.ft.). It has 620 staff in Deansgate, Hale, Alderley Edge and London. Pannone Managing Partner, Emma Holt, said: “We have spent a great deal of time this year finalising our strategic growth plans to position the firm to capitalise on opportunities in the evolving legal market.” She indicated that Pannone might go for two properties in the city centre to cope with its needs.

Catering for the media

In the competition to attract new investment, Manchester has stolen a march on many cities in the UK and Europe by having a major new media complex in Salford Quays.

The scheme by Peel that has brought in the BBC and ITV is of such a size that it has impacted on the whole UK media industry o the point where a wide range of companies catering for media want to be located in the region. This potential has prompted Canning O’Neill to start a new company focusing on the needs of the media, a sector of the economy that was already thriving in the region with a considerable history, including being the most important newspaper centre in the north of England for many years Mark Canning said: “We have seen a dramatic increase in enquiries from media companies and realised there was the potential for a company focused on the industry. In my view, this is the most important trend I have seen in my 22 years in Manchester.”

Among the initiatives from Canning O’Neill is a website devoted to the media industry This is not something that has come out of the blue, because they already had considerable experience of dealing with media requirements.

“We have been involved in filming, notably at the Soapworks,and are familiar with the needs of media companies,“ said Canning. The creation of a new company at a time of tough economic conditions speaks for a degree of optimism. Another new company is Capital & Centric which brings together two North West developers, Tim Heatley and Adam Higgins. Both have considerable experience, with Heatley having been a director of Modus while Higgins has been with Peel, Ask and Manchester Property Alliance Group.

The company’s strategy is to build a portfolio organically without exposure to excessive debt. Heatley said: “The current market provides an opening for companies run by individuals with extensive experience but without the legacy of servicing debt with their portfolio.”

Axa build

Axa Real Estate Investment Managers are likely to be one of the gainers from the current market having received planning permission for the £50 million office scheme at St Peter’s Square. It manages this property on Dickinson Street, fronting St Peter’s Square, for the Co-operative Insurance Society and will now develop a property with a 12 storey structure of 10,033 sq.m. more than double the existing building. WHR and CBRE are lettings agents for a project that apparently depends on a pre let to trigger construction.

The property will meet the top BREEAM standards on sustainability. Axa’s Dorrien Thomas said: “In recent years, Manchester has firmly established itself as England’s premier business location outside London and we are confident that the new development’s prime city location, together with the quality of the space, will make it an ideal destination for local, national or international businesses.”

Attracting investors

F&C Reit Asset Management has bought the 7,060 sq.metres Boulton House, Chorlton Road, Manchester. F&C’s Daniel Plummer said: “We recognise Manchester attracts top inward investors and is a continuing base for existing businesses resulting in a strongly performing occupational market.” Greg Ball of Jones Lang LaSalle, letting agents on the property, added that F&C “take a competitive approach to quoting rentals and offer flexibility, as we intend to subdivide one floor into small suites.”

Holding up

It may surprise the more pessimistic forecaster in the UK, but the regional commercial property market is holding up well and is set to at least match last year’s outcome.

Among the major cities, Manchester has the best balanced market, helped by the scale of its economy and strong entrepreneurial spirit as exemplified by Media City and Spinningfields.

What is happening is that the downturn in the UK economy is providing a test for all regional economies and markets and those with the greatest resilience are emerging as stronger entities. To some extent the fierce competition between Manchester’s two football teams illustrate that spirit.

Analysing the first nine months’ figures for regional office markets, Jones Lang LaSalle (JLL) expects aggregate take up by the year end to equal 2010. JLL notes that in the third quarter rents in Manchester increased by 5.3% on the
previous three months and the Grade A vacancy rate is only 2.1%. Given the tough market, those are impressive figures. Even so, Peter Skelton of Lambert Smith Hampton said: “The market is extremely quiet and it appears that a short term approach has returned bringing a lack of decision making.

That contrasts with the start of the year when there was expectation that we were overcoming the financial problems in the UK.” In his view, the office market lacks direction and there is no confidence that it has reached the bottom. One of the future problems could be the amount of property that will be released by the banks holding it because of bad loans.

So far, financial institutions have been unusually careful in the release of this property but some is being filtered out, notably from Irish sources. In fact, the overall picture of the market can be painted in brighter colours because of planned new development and demand from large companies. An indication of the demand is that there are requirements for at least 27,870 sq.metres (300,000 sq.ft.) of Grade A offices, led by BUPA with a need for 13,006 sq.metres (140,000 sq.ft.).

The impetus is that a majority of its leasing contracts end in 2015. Another major requirement is from Jacobs Engineering for a regional headquarters of 9,290 sq.metres (100,000 sq.ft.). In this case there is the question of whether the company takes existing space or goes for the option of design and build. Also in the market for a large office is the insurance company Aviva.

Winning Design?

A reminder of the quality of the new developments in Salford Quays has come with the short listing of the MediaCity footbridge for an award by the Institution of Structural Engineers. The structure is a cable swingbridge providing pedestrian access over the Manchester Ship Canal into the heart of MediaCity.

According to the organisers of the award for structural and engineering excellence, the footbridge has been designed to respond to the particular geometrical constraints of its location. It anticipates future redevelopment of Trafford Wharf to the south and in conjunction with the existing Lowry Bridge enhances pedestrian links for the area as a whole. The results of the competition for the award, which has been in operation since 1966, will be announced in November.

The impact of MediaCity on Greater Manchester has been highlighted by Property Secrets, an investment organisation. It listed a number of positive points for the city, namely: The movement of thousands of BBC personnel from London is having an impact on the residential market and a range of media and creative organisations; A 2.7% increase in the turnover of retail businesses in the year to March, according to the data organisation CityCO; A 12.8% rise in passenger numbers at Manchester Airport between February and March; A report by Knight Frank dubbing Manchester as one of the UK’s best cities with the strongest investment potential. Alan Forsyth of Property Secrets said: “Demand for new properties in prime locations is experiencing strong growth and increased job opportunities, such as in Manchester, has meant an increased number of people buying properties in the city.”

A similarly upbeat analysis of the impact on the local office market has come from officebroker.com. It reports increased demand from local businesses for office space in the area through the impact of 2,500 employees moving into MediaCity. Jim Venables of officebroker.com said: “As a company we have witnessed an increase in demand in and around Salford Quays since the beginning of the year, a rise which is reflected in the personal experiences of many local providers we work alongside.” Mark Canning of Canning O’Neill said: “Our experience backs up the optimistic views of Salford Quays where, for example, half the Metro building has now let with Insight taking 1,672 sq.metres (18,000 sq.ft.).” The impact of MediaCity has brought a host of lettings at Digital Park and Digital World Centre. For example, Swiss Post has taken Unit 3 at Digital Park as an extension to its existing facility. Canning said of another new scheme, the Soapworks development, that “we are seeing considerable interest from potential occupiers.”

Looking to the future

Two major projects are leading the way in the economy of the region, offering a focus for future growth. The attraction is that Peel’s MediaCity and expansion plans for Manchester Airport are in sectors that offer extended growth and the use of technology.

Indeed, the scale of both projects is exceptional for a regional city. MAG Developments has selected Jones Lang LaSalle and Drivers Jonas as leaders of planning and commercial delivery of Airport City, the Enterprise Zone project, the initial stages of which were worked up by Urban Strategies of Canada. MAG’s John Atkins commented: “This will not be one development but a place making project over a 10 to 15 year period. It is imperative that we ensure that Airport City is of the highest quality and international standing.”

The development has already received occupier enquiries. At the moment the main demand is expected from logistics, freight forwarders, advanced manufacturers, research and development and health related users. Bob Dyson of Jones Lang LaSalle said: “It can evolve into an integrated business district in its own right providing a comprehensive range of commercial facilities, services and revenue streams.” Charlie Cornish, MAG Chairman, said Airport City could create 7,000 jobs as well as create revenue for re-investing in Greater Manchester. The development is taking place on land between the airport and Wythenshawe, to the north of the airport. Important connections are to the University Hospital of South Manchester (UHSM) Mediapark initiative and the regeneration of the town centre. It will require considerable investment in the infrastructure, which will help the whole of south Manchester. But it has the advantage of the airport’s international network.

This connectivity can be seen with the all inclusive package which MAG has launched, aimed at attracting small and medium sized enterprises (SMEs) and start up businesses to newly refurbished offices. The property is 308 Avro Way where suites up to 186 sq.metres (2,000 sq.ft.) are being offered at an all inclusive price of £215.20 a sq.metre (£20 a sq.ft.). Will Kennon of letting agent CB Richard Ellis, joint with Regional Property Solutions, said: “Locations such as the airport are becoming more popular for providing a combination of amenities, an established public transport system and extensive car parking.”