Manchester office investment plummets

Investment in Manchester offices is on course to hit a low of at least five years, slumping by more than 80% from its 2018 total. Research conducted by Colliers International shows that office investment in the city this year stands at around £119m, compared with £651.8m in 2018 and £777m in 2017. This year’s total is also substantially lower than the five-year average of £563.8m. Dominic Pozzoni, director of Colliers’ national offices team, said: “People have not wanted to sell. People have sat tight because they have seen rental values grow, demand grow, and people have reviewed where the economy is.” Despite the low deal value this year, Pozzoni insisted Manchester will be in a more “positive position next year”, predicting that demand for investment opportunities in the city will be high. “A lot of funds we act for, both UK pension funds and overseas investors, are still very focused on Manchester and want to invest,” he said. Chris Ward, Colliers’ national capital markets senior surveyor, said that the low figures this year were largely due to a lack of clarity over Brexit. “It’s been a year of uncertainty,” he said. “I think Brexit has been hanging over everyone, There’s been a lot of people not wanting to make any decisions before they know what is going on with the wider political agenda.” He added: “This has also tied in with a general lack of stock, which has meant figures are low.” Ward added that a sale of Sunlight House, put onto the market by Aberdeen Standard Investments in April, could have bumped up the latest figures. However, as EG revealed in May, the listed office building (for which ASI was seeking offers in excess of £54.3m) was withdrawn. Ward expects investment to “return to normal levels” following the Conservative majority General Election win and the expectation of a Brexit resolution bringing more stability to the market. To send feedback, e-mail lucy.alderson@egi.co.uk or tweet @LucyAJourno or @estatesgazette Photo: Mark Campbell/Shutterstock