E-commerce giants Amazon and the Hut Group are nearing deals to secure a combined 220,000 sq ft for new office hubs in Manchester.
Amazon has instructed Cushman & Wakefield to find it a 70,000 sq ft office in the city centre and has shortlisted three options:
● Patrizia’s No 8 First Street, a new 170,000 sq ft scheme where energy business Gazprom has a circa 50,000 sq ft pre-commitment;
● Co-op and Hermes Investment Management’s Hanover, a 109,000 sq ft office development which is part of the NOMA regeneration project in the city’s Northern Quarter;
● M&G Real Estate and the West Yorkshire Pension Fund’s 101 Embankment, a 165,000 sq ft office building which is fully let to Swinton Insurance but the company plans to sublet the top three-and-a-half floors.
The online retailer has been rapidly increasing its North West presence with distribution bases secured at Harworth Group’s Logistics North in Bolton and Airport City Manchester, the £800m mixed-use regeneration project, a jv between Manchester Airports Group, Beijing Construction Engineering Group, Carillion, and the Greater Manchester Pension Fund.
Meanwhile, the Hut Group is in advanced talks with Manchester Airport Group to fund a 150,000 sq ft office at Airport City Manchester which the online retailer will occupy.
Take-up rises 20%
Manchester office take-up was up 20% year-on-year in the first half of 2017, according to Savills, with the trend expected to continue and push prime headline rents closer to £37 per sq ft in the city centre over the next few years.
The Hut Group, backed by former Tesco chief executive Sir Terry Leahy, owns more than 100 websites selling fashion, beauty, health and lifestyle products, including Myprotein,The Hut and ProBikeKit.
Manchester’s tech sector now accounts for nearly 40% of all enquiries for city centre office space, according to Colliers International. The city was recently chosen by WeWork for its first locations outside London, which total 100,000 sq ft across Allied London’s No 1 Spinningfields and Deka Immobilien’s One St Peter’s Square.
Peter Gallagher, director, national offices at Colliers International in Manchester, said: “The tech and digital enterprise sector now has critical mass in Manchester with more than 140,000 people employed, making it the second city for tech industry after London.
“This creates a maturing ecosystem of innovation and support, greatly shortening the time from start-up to scale up.”
Greater Manchester mayor Andy Burnham has pledged his commitment to making the city a world-leading tech hub, citing its universities, leisure and culture offerings as part of its draw.
Gallagher added: “Attitude works for tech and so does sport and we have both in spades. Years ago, Tony Wilson said ‘this is Manchester – we do things differently here’. My favourite quote of the moment is ‘Manchester is a city that thinks a table is for dancing’.”
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