This article originally appeared on the Savills website at https://www.savills.co.uk/blog/article/289182/commercial-property/reviewing-the-recent-wave-of-refurbished-offices-in-manchester.aspx
Manchester’s office market has gone from strength to strength in recent years, driven by a strong talent pool, exceptional graduate retention rates and diverse occupier base. This has therefore meant that providing an attractive and differentiated office environment is becoming increasingly important to landlords.
This view is mirrored when it comes to occupiers, who are equally looking towards acquiring modern workspaces with standout facilities and amenities. Naturally, this means that we are seeing strong occupational demand for refurbished office space and, with a number of significant refurbs having recently taken place, we are beginning to see the highly positive impact that a refurbished office space has on lettings.
Helical initially introduced amenity into Churchgate House, creating a business lounge, breakout space and coffee shop within the reception refurbishment and, subsequently, the building has been fully let.
This model was then rolled out following its purchase of 35 Dale Street. The building received a full refurbishment with a business lounge reception connected to an independent coffee operator. Again, the space was fully let prior to the refurbishment completion.
Bruntwood has also been at the forefront of this move towards refurbishments, accommodating its customers and adapting the working environment to meet modern day lifestyles. In fact, it sees so much value in supporting its customers that it has recently announced plans to inject £50 million on customer-focused building transformations.
Another good example is Bridgewater House, asset managed by APAM (pictured above), which has recently repositioned itself in the market, offering a mix of conventional offices and exposed services along with a full reception refurbishment. This has transformed the building and has been successful in securing a number of occupiers over the last 12 months.
What all of these schemes have in common is that a fundamental element of each refurbishment has been the creation of a fully enhanced reception space, often with adjoining business lounges, meeting space or retail and leisure amenities. In order to attract occupiers it is vital to get this space right and in this increasingly competitive war for talent, the reception space will often form a future employee’s first impression of a business.
Given the demand for refurbished office space in Manchester, many of the recent schemes were fully let before the project had completed and, as we see a rise in flexible working, a number of the refurbished schemes have been let in whole to co-working operators.
Along with the recent serviced operators entering the Manchester market, landlords now appreciate that it’s no longer acceptable to deliver a basic refurbishment and the level of specification has to reflect the target occupiers. We have seen an increase in occupiers requiring exposed services over a conventional suspended ceiling, along with requiring further amenity within the workplace and an increased focus on wellness.
Given the lack of Grade A supply currently within the Manchester market, we expect to see occupiers that would have historically chosen new Grade A conventional space focussing on the good quality refurbished options, which offer the amenity expected in a modern day office.