Manchester Offices Briefing: Ken Bishop, JLL

Manchester Development

Overview

10th November 2016

Place North West

Breakfast

Office Market in fine fettle despite…………

2

Source: JLL, Q3 2016

0

200

400

600

800

1,000

1,200

1,400

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

000s sq ft

Take-up 10-Yr Average

6686,172

Headline Transactions

• Swinton Insurance – 165,000 sq ft

• Freshfields – 81,300 sq ft

• Co-op Bank – 32,800 sq ft

• Squire Patten Boggs – 28,000 sq ft

• Kacoo Fashions – 25,650 sq ft

Plus 2 transactions in Solicitors hands totalling 100,000 sq ft

One New Bailey

Size: 125,000 sq ft

Amount let: 81,300 sq ft101 Embankment

Size: 165,027 sq ft

Amount let: 165,027 sq ft

XYZ

Size: 145,257 sq ft

Amount let: 145,257 sq ft

Developments Under Construction – PC 2016

Two St Peters Square

Size: 161,113 sq ft

Amount let: 121,500 sq ft

1 Spinningfields

Size: 260,000 sq ft

Amount let: 135,665 sq ft

No 8 First Street

Size: 143,610 sq ft

Amount let: 39,610 sq ft

Developments Under Construction – PC 2017

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Pre-Let Speculative

Development Pipeline 2008 – 2019

Why no completions in 2018?

• Funding, funding, funding

• 8 schemes - only one funded by the private sector

• Options – Local Authority underwrite; pre-let; forward funding

• Constrains expansion and success of the City

Development Pipeline- completion 2019?

100 EmbankmentTristan/Carillion Ask

160,000 sq ft

Brazennose House, Lincoln SquareM & G / CDP106,700 sq ft

24 Mount StreetFORE

80,000 sq ft

11 York StKier

80,000 sq ft

Two New Bailey Square

English Cities Fund

190,000 sq ft

2 & 3 Angel Square

Hermes/Co-operative Group

2 - 145,224 sq ft

3 – 260,907 sq ft

New Victoria

Muse Developments

103,377 sq ft

Development Pipeline

Site Owner:

London & Continental Railways/ Manchester City Council/TFGM

U & I appointed as Preferred Developer

Scheme:

A comprehensive redevelopment of 24 acres next to Piccadilly Station. The cost of the development estimated at circa £500m.

The master plan comprises:

Commercial offices – 700,000 sq ft;

1,330 new homes (2 & 3 bed town houses and 1 & 2 bed residential apartments;

350 bed hotel;

Multi-storey car park; and

Six acre urban park

•

Mayfield Station

Developer:

Allied London

Scheme:

Mixed use scheme on a 5.3 acre site of the formerITV Granada Studios.

Planning

The St John’s Strategic Regeneration Frameworkformally endorsed by MCC in February 2015identifies a scheme with the potential todeliver:

2,500-3,000 townhouses, apartments, live-work units and high-riseliving;

500-600,000 sq ft workspace;

80,000 sq ft of this a refurbishment of the Bonded Warehouse;

300-400,000 sq ft of new leisure;

Two new hotels; and

2-3 dedicated arts and culture buildings including the Factory

St Johns

Union

Bruntwood

66,249 sq ft

PC Q2 2017

Dalton Place

Tesco Pension Fund

65,724sq ft

PC Q3 2017

11 Portland St

Aviva

103,377 sq ft

PC Q1 2017

Will refurbishments fill the gap in supply?

Arkwright House

Catalyst Capital

105,000 sq ft

PC Q3 2017

Heron House

MCC/Bruntwood

109,000 sq ft

PC ??

Hanover, Noma

Hermes/Co-op

121,300 sq ft

PC Q3 2018

Corner Block

Credit Suisse

52, 000 sq ft

PC Q2 2017

100 + 101 Barbirolli Square

AEW + Moorfield/Oaktree

84,044 sq ft & 134,850 sq ft

PC 2018?

Depends on the building

Buy to let(2,387)

PRS(2,416)

Renaker(2,629)

OwnerOccupier

(686)

8,118 apartments

Residential reaching the heights

Pipeline 24,000 apartments

Thoughts on the Future?

• The b****y B word and Trump!!

• Light at the end of the tunnel for major development sites

• Where will the City Centre expand?

• Impact of GPU requirement

• The new paradigm with Mayor Burnham / Anstey and no SHB

• Capitalising on the growing talent pool

Thank you

Ken BishopDevelopment ConsultantManchester+44 (0)20 161 238 6275ken.bishop@eu.jll.com

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