Grade A Drought: Why Manchester's Office Market Is Running Out of Room at the Top
- Rico Naylor
- Apr 28
- 3 min read
Manchester's office market opened 2026 with the kind of numbers that inspire cautious optimism.
First-quarter take-up reached 286,000 sq ft across 51 transactions, broadly in line with the five-year average and spread across a healthy mix of sectors. Professional services firms led activity, while technology, media and telecommunications occupiers contributed around 25% of deals.
On the surface, it looks like a market doing what it should.
Look harder, though, and a more challenging picture takes shape: Manchester has a Grade A office space problem, and it will get worse before it gets better.
No New Grade A Office Space in 2026
No new-build office space is scheduled for delivery in Manchester in 2026.
The only scheme of meaningful scale currently under construction is Landsec's Mayfield development, which will bring approximately 300,000 sq ft to the market, but that completion is not expected until 2028.
For occupiers whose leases are approaching expiry, or who are planning a relocation to upgrade their workplace in the near term, the pool of available Grade A space is effectively fixed.
The consequences for rents are predictable.
Prime headline office rents are forecast to rise between 15% and 20% during 2026, with the mid-£50s per sq ft emerging as the new benchmark for best-in-class space in the city centre, according to forecasts from LEVEL Workspace and Commercial News Media.
For an occupier modelling costs over a ten-year lease, that represents a materially different financial proposition to the market of just two or three years ago.
The Demand Side Is Not Slowing Down
What makes the supply constraint particularly acute is that demand shows no sign of softening.
Tech occupiers, who accounted for around 25% of take-up in 2025, are expected to accelerate their activity through 2026 as borrowing costs ease and access to growth capital improves.
These are occupiers who are disproportionately focused on Grade A, specification-led space, the very product in shortest supply.
Recent high-profile transactions underline the depth of appetite: the Government Property Agency's 114,000 sq ft acquisition at Havelock, BNY's occupation of the entirety of 4 Angel Square in the NOMA district, and Deloitte and Aecom's relocations to Embankment, which has emerged as a credible challenger location for the city's top-tier occupiers.
Each transaction absorbs a portion of a supply base that cannot currently be replenished.
The Pipeline: Thinner Than It Looks
The past twelve months have seen a handful of genuinely significant Grade A completions arrive in Manchester.
No.3 Circle Square delivered 267,000 sq ft in mid-2025, The Island reached practical completion in November 2024 with Virgin Media O2 occupying the upper floors, and No.1 St Michael's opened in Spring 2025 and is reportedly now fully let.
These were the schemes that market observers pointed to as the near-term supply response. They have arrived.
The question now is what comes next, and the answer is considerably less reassuring.
Looking forward, the development pipeline for Grade A office space in Manchester is essentially a single building. Landsec's Republic at Mayfield, a 230,000 sq ft scheme designed by Morris + Company, broke ground in 2025 and will not complete until 2028.
Beyond that, 35 Fountain Street is emerging as a candidate for the next wave, with GMI Construction confirmed as contractor on the 87,000 sq ft scheme in March 2026, though a completion date likely to be 2027.
For occupiers with requirements in 2026 or 2027, these schemes offer limited practical relief. The buildings that were supposed to ease the supply squeeze have already been delivered and absorbed. What remains is a two-year gap between now and the next meaningful injection of new stock.
The Insider Take
By Rico Naylor, MRICS, Founder of CRE Insider.
The Q1 2026 take-up figures are a reminder that Manchester's office market remains structurally active and commercially attractive.
But they should not distract from a more uncomfortable reality: this is a market operating with a Grade A deficit, and that deficit will persist for at least two years.
For occupiers, the practical implication is clear.
Those with lease events approaching need to be engaged with the market now, not when their break option is six months away. The cost of acting late, both in rent terms and in the quality of space available, is rising with each quarter that passes.
For investors and asset managers, the current supply squeeze reinforces the case for repositioning and upgrading secondary stock.
The window to bring a well-located but tired asset to a Grade A standard, and capture the premium that comes with it, is open. Manchester's Grade A drought is not a crisis, but it is a clear market signal, and the professionals who read it early will be better placed to act on it.
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