City on course to be European regional capital
MANCHESTER’S focus on city centre development and its leading role in urban policy and devolution have placed it in a strong position to become a competitive European regional capital, according to property experts.
That was the conclusion of a breakfast briefing event held in the city this morning hosted by real estate and investment management specialist JLL which brought together experts from the property consultant and economic think tank Centre for Cities to discuss Manchester’s outlook in the context of increased regional devolution.
JLL revealed that property investment volumes in Greater Manchester reached £1.7bn in 2014, the highest on record, positioning it among similar regional economic centres in Europe. Annual investment in Hamburg, for example, averages £2bn. City centre leasing volumes, at 1.3 million sq ft, were also the highest on record.
The consultant’s research also showed a transition in the sector focus of investment in Manchester with 50% in the office market, compared to 20% over the past five years. According to JLL this demonstrates the increasing interest among large-scale investors in Manchester and their growing confidence in its economic prospects.
Jon Neale, head of research at JLL, said: “The North West, and Manchester in particular, is forecast to see very strong office employment growth in the short to medium term – exceeding London on some measures.
“Demand for office space in the city should remain strong – buoyed by ‘Northshoring’ as companies reconsider the costs associated with having large numbers of staff in the capital.
“Manchester has outperformed the other major regional cities for some time in terms of leasing volumes. This is testament to the leading role the city has taken in both regeneration and urban policy.
“It is now in a strong positon to continue to compete in the UK and with Europe as the jobs that will drive the economy over the next decade are particularly drawn to city centres. With a greater say over infrastructure investment, thanks to its leading approach to devolution, Manchester has the opportunity toenlarge its catchment further – and the number of businesses who will consider it as a location.
“That said, there’s still limited available office accommodation in the city and over the next five years a new wave of schemes will need to be made available to ensure the city continues to capitalise on its significant growth potential.”
According to Oxford Economics, Manchester will experience forecast employment increases of up to 20% over the next five years in the city’s strong technology and professional services sectors.
The growth of private sector employment in the area overall is forecast to outperform both London and other large regional cities through to 2019. This has led to the expectation that the city will outperform the US, UK and global GDP growth over the next three years.
Andrew Carter, chief executive at Centre for Cities, who presented at the event, said: “Manchester has emerged as the strongest voice in urban policy and devolution, perhaps even more so than London, with the devolution of power and its economic position readying it for significant growth.
“Regardless of how devolution plays out across the rest of the UK, Manchester already has a head start with the significant investment levels seen.
“The challenge now is for neighbouring areas in the North West, which haven’t experienced this level of growth, including Burnley, Blackpool and Preston, to capture part of this focus on the North West driven by Manchester. These will now need to identify with the city more in order to capitalise on Manchester’s success before they achieve significant expansion.”
