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1:00 am, June 9, 2008
Peel seeks £30 per sq ft from Media City tenants
By Joanne Birtwistle
Tenants at Media City on Salford Quays will be asked to pay up to £30 per sq ft — more than Manchester's Spinningfields and twice the average rent for the surrounding area.
Media City managing director Brian Greasley, speaking at a discussion forum in Manchester's Circle Club, told attendees that the price was good value from a national perspective. It is the first time any concrete rental figures have been given for the 200-acre Peel Holdings development, whose only current confirmed letting is to the BBC.
“Gray's Inn Road (where ITV is based in London) is £90 a sq ft,” said Greasley. “Even in the plush bits, Media City will be about £30 per sq ft.”
He added that space was also available now from £12 per sq ft for “two guys in a room” but refused to be tied down on an actual price range, saying all rates were variable and depended on extra services taken. Peel has appointed Cushman & Wakefield as agents.
In Manchester city centre, the current record rent is £34.50 per sq ft, paid by private bank Investec for the penthouse in The Pinnacle building on King Street. The average rent at Spinningfields, home to several large professional services firms, is pitched at around £28.50 per sq ft.
The average rent on Salford Quays is around £15 per sq ft, with headline rents of around £20 per sq ft. Several other developments are being built around the Media City site also pitched at creative industries, such as Property Alliance Group's Broadway Quay and Orbit's Broadway House, which is 400 yards from the Peel site. Tony Jones, managing director of Orbit Developments, told Crain's that its development would be looking to charge around £17.50 per sq ft and attract “value occupiers”.
“I'm sure there will be plenty of companies who don't want to pay £30 per sq ft, but that's not to say it isn't achievable,” he said. “Being close to the BBC has a hidden value. If companies want to be there, they will pay it. It's all about location.”
However, Alex Connock, director at Ten Alps, said that paying £30 per sq ft rent was “about as compelling as a £30,000-a-year season ticket to Carlisle United”.
“Most media companies start with no financial backing at all,” he said. “I am certain the way to get them into Media City would be to offer very cheap rents and super-flexible terms — serviced offices, in other words — and by cheap I mean £10 per square foot or less. It's not landlord heaven but it will get the business in.”
Rob Yates, a director at DTZ, said media companies would be looking for an inclusive offering at the prices being charged. “That sector tends to have restricted budgets, so they would be looking to include rates, services and furniture included,” he said. “Those rents are actually above headline rents in Manchester city centre at the moment, but Media City is a good location and can be complimentary to the likes of Spinningfields and Piccadilly Place. I'm sure it will appeal to companies outside the media.”
Greasley told Crain's that non-media companies, such as law firms, were welcome to take space in the development and was adamant that the BBC “has never had any say” on who would move into Media City.
“The BBC is less than 10 per cent of the development,” he said. “It's for the whole service media industry. So lawyers, lighting companies, IP registration companies — anything related to media should be in Media City. There are already 30 companies working in Media City and they work in a range of supportive industries.”
Greasley said that he had also reassured one small business owner currently taking space at the Pie Factory that she wouldn't be elbowed out in favour of a business able to pay higher rents once Media City was more developed.
“If people just want the space at £12 per sq ft they can have it. We are being flexible. We have people already who are only taking space for three months, others are taking space for a year. It is what it needs to be for the industry,” he said.
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