Crane survey reveals impact of recession on city development

JUST 30 residential properties will be completed in the centre of Manchester over the coming year, down from 2,050 in 2009, the latest property report has shown.

However, according to Drivers Jonas Deloitte’s annual Manchester Crane Survey, the volume of sales is now gradually increasing, although many investors have preferred to let their properties until the sales market improves.

The public sector will boost the residential market’s revival, with two previously stalled schemes – Northerngroup’s Ice Plant and Artisan’s scheme on Blossom Street – expected to benefit from the Homes and Communities Agency (HCA) Kickstart funding, it said.

The Crane Survey also reveals similar low development activity for Manchester’s office market, with just four office schemes set to complete in 2010 – less than half the amount seen last year.

With the availability of office accommodation remaining high, the report said that headline rents could continue to fall this year but that with a limited office development pipeline, values could firm up once supply diminishes.

In addition, the Crane Survey outlines that the quality of stock – with 1 million sq ft of commercial space available being Grade A – has good prospects for being let quickly once the economic recovery gathers pace.

The consultancy believes that private sector investment will be slow to return and identified life sciences and bio-medical research, office space and commercial refurbishment projects as areas for potential growth.

Despite the anticipation of public spending cuts and the uncertain outcome of the forthcoming general election, the report said that the current pipeline of large publicly funded development will continue to bring the city forward.

In particular, it highlighted major schemes such as the redevelopment of the Manchester Metropolitan University, the proposed Mayfield civil service campus near Piccadilly and the new buildings at Chetham’s School of Music.

John Adams, head of Drivers Jonas Deloitte in Manchester, said: “There are very few places outside of London that can boast such an exciting and robust public sector development pipeline.

“These large scale investments demonstrate a huge level of confidence in the city region’s ability to continue to grow and prosper.”