As businesses continue to look at ways to cut their operating costs in an effort to combat with the recession office space requirements for companies are falling rapidly throughout the UK.
The outlook does not look better in the future as Jones Lang LaSalle forecasts that so long as unemployment rates continue to rise property values will continue to fall for Manchester office space. Additionally, the company predicts that as subletting becomes more forced occupier controlled office space will end up back on the market without many interested buyers.
The head of Jones Lang LaSalle’s National Office Agency team in Manchester, Trevor Sloan, stated that although the firm has noticed that while many of the UK’s major businesses are reducing their desk space Manchester has been liable to most of the fallout. Sloan compared the effect in Manchester of empty office space to be more of a trickle than a flood as it is in other locations.
The property firm reported that a great majority of the office space that is vacant in Manchester was actually released by landlords who were forced to put redevelopment plans on hold instead of by tenants who were cutting back. Thus, the vacancy rates in Manchester have not yet been as harshly affected as the numbers may show.
However, the company predicts that within the next year tenants in the city will be forced to not only drop Grade B space back onto the market, but also high quality Grade A office space which will lead to lowered office rents.