The Greater Manchester Combined Authority (GMCA) has launched a strategic intervention to tackle a critical shortage of prime commercial space in the city. The Greater Manchester Good Growth Fund, a £1 billion initiative championed by Mayor Andy Burnham, is designed to kick-start new office developments that have been stalled by a challenging economic climate.
According to Will Lewis, founder and CEO of property consultancy OBI, the fund will help bridge the current "viability gap" caused by high build cost inflation, expensive debt, and softening investment yields. This long-term investment is a win-win for the region, stimulating new schemes while generating financial returns to be reinvested locally.
Unlocking New Commercial Space
The funding is earmarked for the delivery of a significant amount of new and refurbished workspace. The projects will provide buildings ranging in size from 80,000 sq ft up to 225,000 sq ft, with individual floorplates from 10,000 sq ft to 26,000 sq ft. This variety is set to cater to a wide scope of businesses.
Crucially, all the supported schemes are "oven ready" with implementable planning permission across three micro-locations within Manchester. The projects are scheduled for a phased completion throughout 2028 and 2029, a timeline described as incredibly well-considered.
Economic Impact and Rental Outlook
The initiative will breathe new life into Manchester's heritage, including the repurposing of iconic Listed buildings like The Kendal building, creating space for over a thousand jobs. The new commercial and lab space will stimulate key growth sectors such as financial & professional services, tech, cyber, life sciences, and advanced manufacturing.
The rental profile of these new spaces is expected to set a new benchmark for the city. Rents are likely to be launched from £45.00 per sq ft, with some space projected to exceed £60.00 per sq ft upon completion.
Averting a Prime Space Shortfall
Market analysis highlights the urgency of this investment. Manchester's existing prime office supply is expected to be fully absorbed by the end of 2026. Even with the 600,000 sq ft of new office and lab supply from the Good Growth Fund and other pipeline developments, a shortfall in prime space is still projected if the current high demand continues.
This new wave of supply is therefore critical. It is projected to comfortably be absorbed by demand, safeguard the city's economic health, set new headline rents, and create a viable platform for future exciting schemes without oversaturating the market.
