CoStar Analysis: The Salford Quays Recovery Continues to Gather Pace

By Jamie Campbell - Thursday, October 05, 2017 14:26

The office vacancy rate in the Salford Quays submarket has continued its downward trend since 2015, helping average rents to recover in recent quarters, according to CoStar’s data.

The large-scale development of MediaCity and Soapworks meant that supply far outweighed demand in Salford Quays during 2010–14, causing vacancies to be among the highest in the Manchester market and rental rates to fall. However, net absorption has recovered notably since, bolstered by significant moves for the likes of TalkTalk (100,900 SF), the Home Office (56,000 SF), and AJ Bell (94,000 SF). This has set the vacancy rate on a downward trajectory and supported the return of average rental growth.

Momentum looks set to continue in 2018, with BUPA due to take occupation of its new 148,500 SF headquarters (the Regent) and Kellogg’s moving its UK headquarters from Trafford to 48,500 SF in Orange tower at MediaCity. Furthermore, improving fundamentals are likely to be supported by landlord’s retaining a number of vacant spaces for co-working, as Salford Quays continues to build on its reputation for being a leading hub for TMT firms and start-ups.

jcampbell@costar.co.uk

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