Manchester office market outlook 2026 - CBRE's Matt Shufflebottom

As Manchester’s commercial property market enters a pivotal new chapter, Matt Shufflebottom, Director in CBRE’s Manchester Office team, provides an exclusive outlook on the trends set to reshape the city in 2026.

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Matt Shufflebottom, CBRE

A Look Back at 2025

With Christmas and New Year celebrations firmly in the rear-view mirror, there is a growing sense that 2026 will be a pivotal year for Manchester’s commercial property market, particularly the office sector. Before looking ahead, it is only right to reflect on a productive 2025 and celebrate the notable successes.

Despite many challenges, Manchester city centre performed well. Office take-up for 2025 is expected to reach 1.1 million sq ft, broadly in line with the five-year average. A new headline rent of £45.00 per sq ft was achieved at the hugely successful St Michael’s development, which was fully let ahead of practical completion. Elsewhere, the development of 3 Circle Square completed in Q2 and has since secured lettings to Trader Media, Puma, Havas, and the ICO, totalling 195,000 sq ft combined. M&G’s refurbishment of Aviary also performed strongly, securing major deals with Latham & Watkins and Mazars for a combined 67,000 sq ft.

These transactions reflect a continued ‘flight to quality’ across the Manchester market. Occupiers are prioritising best-in-class working environments for their employees. More significantly, they signal a renewed growth in physical office footprints in the city. This suggests that businesses are once again focused on expansion and embracing office-based working. While this remains a divisive topic for some, many would agree that this trend supports long-term business performance and employee success.

The Future of Office Space in Manchester

Looking ahead, Grade A supply remains a key talking point in Manchester. No new-build office space is scheduled for delivery in 2026. Encouragingly, however, 2025 saw Landsec commence development at Republic, Mayfield, alongside Relentless starting on site with Phase 2 of St Michael’s. These schemes will deliver 240,000 sq ft and 76,000 sq ft respectively in 2027. Bywater has also entered the new-build race, with its redevelopment of 35 Fountain Street set to deliver 64,000 sq ft of prime Grade A workspace in 2027.

The release of patient equity funding at the end of 2025 is likely to act as a catalyst for further speculative development. Several schemes with detailed planning consent have benefited from this conditional funding. This funding is designed to bridge the viability gap for new developments following rising build costs, higher interest rates, and softer exit yields. Rental growth is also expected to play a key role in restoring viability. Prime rents are forecast to increase materially in 2026. While the question of where prime rents will ultimately settle was hotly debated throughout 2025, emerging evidence suggests that £55.00 per sq ft and above could become the new benchmark during 2026.

The Supply and Demand Dynamic

Manchester has long been regarded as ‘under-rented’ compared to other major regional cities. The key differentiator for Manchester has always been supply. Cities such as Edinburgh and Bristol have experienced sharp rental growth driven by prolonged supply shortages. In contrast, Manchester has consistently led the way in speculative development and investment in refurbished workspace. While this has arguably restrained headline rental growth, it should not detract from the city’s strong and sustained levels of occupier demand. The evolving supply-and-demand dynamic now suggests that Manchester is well-positioned to achieve a new prime rent in 2026, reshaping the market in the years ahead.

Prime refurbished workspace will play an increasingly important role during this period of limited new-build availability. It is likely to be one of the biggest beneficiaries. Aviary and Pall Mall set the tone in 2025, both securing rents in excess of £40.00 per sq ft. Further prime refurbishment schemes will be brought to market during 2026, including Sunlight House, 101 Embankment, and The Metropolitan. Depending on where the new prime benchmark is set, there is clear scope for further rental growth across this segment.

The Potential for Pre-Lets

There is also the potential for a return of the elusive pre-let, historically rare in a market known for its depth of speculative supply. A government pre-let at Ralli Quays may be the first such deal announced in 2026. With limited new-build options available for occupiers seeking floorplates of 100,000 sq ft or more, pre-lets could re-emerge. This is particularly true with several schemes holding detailed planning consent and ready to proceed.

Navigating External Challenges

External headwinds remain an unknown as we move into 2026. However, experience suggests they are likely to exist in some form. Over the past decade, Manchester has faced political uncertainty, economic disruption, and even a global pandemic. Yet, the office market has continued to perform with relatively few exceptions. Recruitment and retention of talent remain top priorities for employers. Real estate continues to play a central role in that strategy. Well-located, amenity-rich workspace is best placed to capture this demand.

Conclusion: Looking Ahead

With plenty of reasons for optimism, we look forward to the year ahead. I wait with bated breath to see where Manchester’s new prime rent will land. The landscape is changing, and I believe that the city is on the brink of a transformative period. The focus on sustainability and innovation will be crucial as we navigate these shifts. The future is bright, and I am excited to see how Manchester’s commercial property market evolves in 2026 and beyond.