MEPC and Bank of New York Mellon have signed the largest UK regional office letting in four years, after the global banking firm agreed to lease the entire 200,000 square feet at Manchester's 4 Angel Square offices.
The deal will see the company relocate from two existing locations in Manchester. According to CoStar data, it occupies circa 87,000 square feet at One Piccadilly Gardens and 51,000 square feet at 3 Hardman Street. The bank will complete its relocation by 2026.
BNY has agreed an unspecified long-term lease at the 10-storey scheme, which sits in the wider NOMA offices campus. It also houses the likes of Amazon and clothing brand Adanola, comprising around 4 million square feet of properties in the north of the city centre.
The agreement also serves as a major shot in the arm for the Manchester office leasing market which at the halfway point of the year had recorded 510,900 square feet of deals, according to JLL analysis, and its strongest first-half performance since 2019.
According to JLL data, a deal of this size or larger has not been achieved since 2020, when a couple of agreements were agreed in the 'Big Six' markets outside London. These were BT's deal for 283,000 square feet at 3 Snowhill in Birmingham, while investment firm Baillie Gifford took 280,000 square feet at The Haymarket in Edinburgh.
4 Angel Square is a net zero operational carbon building, which has a Five Star NABERS Design for Performance rating, as well as being BREEAM 'Outstanding' and WiredScore 'Platinum'. The building is also rated EPC A and is a 4-minute walk from Victoria station.
Sean Turner, BNY Manchester site executive, said in a statement: "Manchester is a key location for BNY. Our high-performing teams will come together in a prime city-centre office, providing a state-of-the-art environment that enhances client experience, culture, collaboration, and innovation."
Councillor Bev Craig, leader of Manchester City Council, added: “The arrival of BNY shows the international renown in which this neighbourhood is held – and highlights the type of investor confidence that is helping Manchester to take our place as a significant global city, a place of sustainable growth and job creation, and importantly, a place of opportunity for our people and our communities."
MEPC has consent for a further 310,000 square feet at the wider NOMA development in the form of 2 and 3 Angel Square. The existing 1 Angel Square building comprises more than 300,000 square feet and was bought by Menomadin Group last October for circa £140 million.
The Manchester market is also waiting on another significant deal to complete this year, with CoStar News reporting in May that used car sales website Auto Trader is under offer to take 130,000 square feet at Bruntwood SciTech's No 3 Circle Square development.
Peter Gallagher, a consultant in Colliers' national offices team, said: "Manchester leads the regional ‘Big Six’ in average inward investment take-up for a reason – it has always offered large corporate occupiers plenty of options. However, that dynamic could be about to shift as we predict a scramble for what remaining space there is left in the city.
"Fortunately, the city remains well-positioned to accommodate the next wave of future growth and large corporate relocations. However, occupiers will need to start planning much earlier than they have become accustomed to."
CoStar analyst Giles Tebbitts said larger deals in the city have been picking up following a slump at the end of last year, the majority for new or refurbished accommodation, which is letting fast.
He added: "The vacancy rate in Manchester's central business district stood at a cyclical low of 7% in 2020 as the pandemic struck but rose to almost 12% by the end of 2021. It has stabilised in recent years, but the strength of demand this year has brought it back into single digits, as take-up is currently outpacing the delivery of new space and occupiers leaving space.
"Another tranche of new space will be delivered soon, such as 100,000 square feet at the Island, John Dalton Street and 225,000 square feet at 3 Circle Square, although there are further rumours of large deals that would further boost take-up figures for the year and keep the vacancy rate on a downward path."
MEPC and NOMA was represented by Colliers, while JLL acted for BNY.