Property market to remain subdued, says BPS panel

MANCHESTER’s property market is likely to remain subdued while banks deal with a wave of commercial property debt that  needs to be refinanced, according to Ask Developments’ executive director Alan Burke.

Speaking as part of a panel of property experts at Pro Manchester’s Business and Professional Services Conference at The Point in Old Trafford last week, Burke said that banks have around £250bn worth of commercial property debt on their books – some £35bn of this needs to be refinanced this year and a further £32bn next year.

“Banks are concentrating on their existing loan booms and have not really opened for new lending,” he said. “There’s no real appetite for risk and I don’t think that will change either this year or next.

He added: “I do see the prospect of being able to get some projects away through funding from other sources, though.”

For instance, he said that it had talked to of other potential investors such as US-based property investor Hines, which had showed interest in Manchester and Birmingham as alternatives to London’s rapidly-appreciating commercial property sector.

Nick Jonhson, deputy chief executive of Urban Splash, said that Manchester benefits among international investors from being viewed as “Britain’s other city”.

“Things happen here that couldn’t really happen anywhere else.”

Johnson said there had been a backlash “against what became known as the regeneration industry”, but added there was a lot of validity in initiatives that have helped to transform large areas of the city.

Gavin Elliott, head of BDP’s Manchester studio said that the property slump had led to the “cessation of commercial property activity for 2-3 years, and it hasn’t really picked up since.”

As a result, he argued that the workload for architects within its home city had slowed.

“There is work out there – you just have to jump on a plane to find it,” said Elliott.