City’s property construction boom showing no sign of slowing down
The residential sector continues to drive record levels of real estate development activity in Manchester, according to Deloitte Real Estate’s annual Manchester Crane Survey.
Now in its 20th year, the survey has revealed record levels of residential construction for the third year running.
A total 14,480 residential units were reported to be under construction in 2018, representing an increase of 30% on 2017 and double that of 2016.
The city also enjoyed a record year for residential units being delivered to market, which is at its highest level since 2006 with 2,569 units completed.
The pipeline of data points towards 2020 having the highest rate of delivery since the Crane Survey began in 1999.
Key residential development starts in 2018 included projects Elizabeth Tower and the Crown (664 units) and Embankment West (503 units).
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 data comes as part of significant growth across a number of key development sectors.
In the office sector the report shows more than two million sq ft of office space under construction across 13 schemes – a remarkable increase on the consistent levels of 1.5 million sq ft reported between 2015 and 2017.
The most noteworthy step-up in the office sector was the considerable shift towards pre-let construction.
Simon Bedford and Mel Wilson from Deloitte Real Estate team
A total 25% of all office developments on site in 2018 were pre-let, increasing from just 10% in 2017.
On the deals front, the city experienced a number of high profile announcements, including HPE at Circle Square, Booking.inc. at St John’s, and Amazon at Hanover House.
“The marked increase in office construction levels is reflective of the continued draw to the city for major businesses,” said Mr Bedford.
“Investor confidence is booming, as the rise in pre-let deals clearly demonstrates.
“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.”
The Crane Survey also highlights considerable investment in education and research projects, such as Corridor Manchester (1.1m sq ft), the Graphene Engineering Innovation Centre (GEIC) and the Manchester Engineering Campus.
This is supported by a community of more than 100,000 students currently attending university in the region and the highest number of purpose-built student accommodation under way since records began in 1999, at 1,749 units in 2018.
The hotel sector has also seen a flourish of activity, with a new record being set in 2018 on the number of hotel rooms under construction – 1,963 new bed spaces.
Coupled with improvements to travel infrastructure and public attractions, the outlook for Manchester’s tourism industry looks strong.
Mr Bedford said: “Manchester continues to set itself apart in its growth strategy, acting as a blueprint for many other developing cities across the UK and Europe.
“The findings of this year’s Crane Survey are extremely encouraging and reflective of a real sense of optimism surrounding the city’s economic future.
“Looking ahead, new direct services between Manchester Airport, and, among others, Tel Aviv, Los Angeles, and Mumbai, are an indicator of the city’s growing international connectivity.
“This is set to impact positively on tourism in 2019, and will no doubt cement Manchester’s position as a location of choice for global businesses.”
