Manchester’s tech-influenced occupiers accounted for close to a quarter of total take-up between 2013 and 2017, according to a Knight Frank report calling for the city to rethink how it defines and responds to tech companies.
IT and telecoms occupiers completed 144 deals across 700,000 sq ft over five years in Manchester. But take-up among all firms closely linked to tech totalled 1.4m sq ft – 23% of total office take-up.
Knight Frank’s “Catching the Next Wave” report argued that Manchester needed to broaden its definition of tech and adapt to the ways it would affect a range of sectors – or risk losing out on a growing sector.
The report’s broader definition of tech occupiers encompasses advanced manufacturing; advanced materials; energy and environmental sciences; life sciences; and media, marketing and entertainment.
Although traditional tech companies already have a significant presence in the city, the report argues that the broader definition helps highlight how much more far-reaching the impact of tech will be on Manchester.
David Porter, head of at Knight Frank Manchester, said: “This new distinction between real estate as a product and real estate as a business service is at the heart of changes occurring in the market.
“Investors and developers have to respond to it if they are to create buildings that are attractive not just for tech occupiers but to businesses of all types. It is ultimately the key to capturing the next wave of occupiers.”
Key takeaways from the report
■ “Back-office” is a redundant term – occupiers of all types are rethinking their real estate footprint. Major banks such as Lloyds, Barclays and the Co-operative Bank have what have traditionally been known as back-office sites in Manchester, but as banks become more dependent on technology and innovation to deliver what customers want, those back offices become a central part of their strategy. Banks will need to cater to what their tech teams need from their offices.
■ Industrial spec development will be increasingly difficult – as occupiers start to integrate automation and robotics into their industrial assets, their requirements will diverge from each other. Landlords and developers will have to work more closely with occupiers to satisfy their demands for more complex assets.
■ Under-25s and tech workers rent – but what they really want is affordability. In a survey of about 10,000 PRS tenants, 69% of under-25s said the most important factor when choosing a rental property is that the rent is within their budget. Most expect to still be renting within three years, but over a quarter expect to own their own home.
■ An incoming wave of tech giant activity – as companies such as Google, Amazon and Microsoft start targeting markets ranging from healthcare to insurance, their footprint will grow and they will need more space in places where they might not have needed space before. That is an opportunity for cities like Manchester to pitch for secondary HQs.
■ The office of the future is dense and flexible – “The 1980s prediction that technology would fuel home working and the total dispersal of the workforce away from office environments has proved wildly displaced,” said Mark Bamber, a partner at Knight Frank. With collaborative and hot-desking space becoming more common, occupiers are starting to push for as little as six sq m per person at an office – a far cry from the traditional 10 sq m per person.
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