CBRE in Manchester, the international property consultants, has announced that 2018 was a record year for deals in the city, with the company having advising its clients on over £1.5bn of commercial real estate investment transactions.
More than 40 individual large-scale transactions were concluded by the company’s Manchester team over a wide-range of sectors which included retail, office, logistics, leisure and healthcare, and demonstrating the underlying health of this North-west economy.
During the year, CBRE advised Bruntwood in securing L&G Capital as a joint venture partner to create Bruntwood Sci-Tech, the UK’s largest property platform dedicated to driving science and technology growth in the regions. The partnership has already led to a £360m investment of capital, property and intellectual assets into the new venture.
L&G has also committed to buying the entire West Tower development on its completion due in May, which will provide 350 residential apartments, along with 150 parking spaces and communal residents’ lounges.
Colin Thomasson, executive director and head of capital markets at CBRE in Manchester, said:
“Our transactional activity reflects the continued attractiveness of Manchester and the wider North West region.
“Notwithstanding the challenges presented by Brexit, our local economy is thriving and demand from investors and occupiers remains strong.
“As Manchester continues to grow it is becoming more attractive to a range of different businesses in the tech, digital, fin tech, health innovation, creative, film and media sectors, and this will ultimately sustain investment over the long term.”
All this is reflected in some of the major lettings confirmed over the last year including Booking.com at Enterprise City, and Qiagen at CityLabs. It is expected that major lettings will continue in 2019.
A number of other high profile announcements include HPE at Circle Square, the Booking.inc. at St John’s, plus WeWork at Dalton Place, HMRC at 3 New Bailey, and Amazon at Hanover House.
In addition, three more schemes at Old Granada Studios, Bonded Warehouse and ABC are being delivered at St. John’s by Allied London and are part of larger mixed-use schemes that include studio space for the creative, digital and media industry as part of the Enterprise City initiative. The University of Manchester’s new Graphene Engineering and Innovation Centre (GEIC) represents a further £200m investment in the city.
Considerable investment in education and research projects, such as Corridor Manchester, the (1.1m sq ft), the Graphene Centre and the Manchester Engineering Campus, supported by a community of over 100,000 students currently attending universities in the region and the highest number of purpose-built student accommodation underway since records began in 1999, at 1,749 units in 2018.
The hotel sector is also seeing record activity, with the number of hotel rooms under construction in 2018 at 1,963 new bed spaces. In total there are nine new hotels are under construction, four of which are in the city centre, two are located within NOMA and the Northern Gateway and one within the Southern Arc.
As the boundaries of the city centre expand, the strength of the business visitor economy goes with it, positioning the city as a world-leading conference destination. Coupled with improvements to the travel infrastructure and public attractions, the outlook for Manchester’s tourism industry is also very strong.
Manchester airport has direct and daily flights to many international destinations including New York, Tel Aviv, Los Angeles, Beijing and Mumbai, an indicator of the city’s growing international connectivity.
The pipeline for all developments remains strong in 2019 with new starts anticipated including the new QBIC hotel at John Dalton House.
Figures just released from the ONS show that, as of 2018, there are 23,845 businesses in Manchester, a rise of 58% from 15,060 in 2014 with a rise in more than a thousand businesses in the past 12 months alone, from 22,490 in 2017.
Retail is the most popular type of business across Manchester, followed by 4,215 businesses in the professional, scientific and technical industry, ahead of 1,805 companies in the property sector.
The rising numbers seen in the city of Manchester over the last four years reflect the national trend, which also shows a decline in peripheral towns such as Trafford, Wigan and Stockport where numbers have fallen, by 470, 195, and 130 businesses respectively.
The residential sector has continued to achieve record levels of development in Manchester for a third year running. Forty eight residential schemes were in progress last year, up from 41 in 2017, and they are set to deliver 14,480 residential units in the city.
Anyone visiting Manchester lately cannot fail to be surprised at the sheer number of cranes on the skyline, and according to accountant’s Deloitte Real Estate division its annual Manchester Crane Survey it showed over 3,345 units were under construction, compared to the same time last year. The projected delivery over the next three years will be greater than the total number of residential units delivered between 2007 and 2018 says Deloitte.
Several build-to-rent schemes in Ancoats and New Islington, including Manchester Life’s Smith’s Yard and Sawmill Court, Mulberry’s The Astley are bringing record numbers of residential units to market. Five more such schemes were completed in Salford, including Slate Yard Wharf and Middlewood Locks, while more residential development starts in 2018 included Select Property Group’s Embankment West, FEC’s Mount Yard, Renaker’s Elizabeth Tower at Crown Street, and Capital & Centric’s Crusader Mill.
Simon Bedford, partner at Deloitte Real Estate, said:
“Last year Manchester established itself as one of Europe’s fastest growing cities, and this year’s report shows no sign of activity slowing down.
“The city is leading the way in catering for an increasing population through the development of entire new neighbourhoods – whether that is bringing forward new living, retail or office space.
“These new districts are redefining the parameters of the city centre as development spills out into the suburbs, particularly in the northern and eastern quadrants of the city.”
“The marked increase in office construction levels is reflective of the continued draw to the city for major businesses. Investor confidence is booming, as the rise in pre-let deals clearly demonstrates” said Bedford.
“With creative, media and tech occupiers leading the major office deals in 2018, there’s also a growing diversity in Manchester’s job market – we can expect this to play a key role in boosting the city’s economic growth and talent retention in the years to come.”©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.