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.”

Going bust

Judging from the latest figures for business failures, the economy is having a hard time picking up speed in the region. According to Equifax, the failure rate of businesses in the North West increased by 9.1% in the third quarter compared with the same period of 2010. In fact, that is half the national rate.

To some extent the figures should not surprise since retailing has had a bad period with a 41.8% rise in failures. Mark Nuttall of Equifax commented: “The North West has seen failures creep up by 10%, which highlights the overall UK picture and suggests that businesses everywhere need to remain cautious. The reality is that businesses are continuing to find it much harder to keep their heads above water as the economy fails to pick up.”

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.