It is not news that Manchester is a booming city with great future prospects. We reported recently that its economy is set to grow to £71bn GVA annually by the end of 2024, fuelled by the creation of 28,000 jobs and a huge amount of foreign direct investment (FDI).
However, the scale of Manchester’s opportunity to keep growing and growing has been underlined this week by CBRE’s Which City? Which Sector? report which has delivered even better news than could have been expected.
The report analysed 50 of the largest regional towns and cities in the UK outside of London to evaluate their potential in a range of fields, including housing, offices, retail, life sciences, and industrial.
Commenting on the research method, Jennet Siebrits, Head of UK Research at CBRE, said: “The way towns and cities grow and evolve is very much reflective of their local geographies, natural resources, and cultural history.
“As a result, no two cities in the UK are the same, and subsequently, different real estate sectors thrive in different locations. Real estate professionals need to be cognizant of these differences to help inform their strategies.”
While it is true that no two UK cities are the same, it appears that no others in the UK outside of London excel to quite the same level that Manchester does. The city was ranked in the top 5 for almost all categories included in the report, and was first in approximately half of them.
Manchester's robust performance is attributed to a variety of factors. Key among them is its projected population growth of 6% in the next decade, a huge current and future talent pool, and an estimated consumer spending increase of 24.7% within the decade thanks to economic growth. Demand for office space and housing is set to increase alongside this.
With its thriving retail, tourism, and hospitality sectors, a diverse industry base, strong economic fundamentals, and one of Europe's largest student populations, Manchester continues to demonstrate remarkable resilience and growth potential.
Here are just some of the highlights for Manchester…
Manchester has the highest office-based employment rate of all cities measured by the report, and it also has the highest 10-year growth prospects, with a projected 13% increase in that time.
It also has the largest pipeline of new office space, with approximately 1.2m sqft in development as of the time of writing. Furthermore, more than 400,000 sqft of that is either pre-let or currently under offer, demonstrating its attractiveness and the scale of success that Manchester’s office market is seeing.
Manchester is one of the top ranked cities for future growth prospects in a sector which CBRE estimates will see a spending increase of 9.5% in the next five-year period. The city also has by far the highest level of retail space per capita of all major cities in the report.
This fantastic retail performance, and the even better future potential, speak to Manchester’s affluence. The report notes that cities with high retail spending often see healthier property performance, have lower vacancy rates and experience higher rental and capital value growth – making it a key indicator for anyone looking at Manchester’s property market.
Life sciences is a sector which is a shining example of the UK’s aspirations and future industrial ambitions. In so many ways, the industry is a huge opportunity for the future, and Manchester is in the UK’s top three cities for the sector along with Cambridge and Oxford.
The report states that Manchester has one of the biggest science graduate populations in the UK – a testament to the strength of its universities and the quality of research that goes on there. Particular strengths include digital health and clinical trials, and ambitious projects like the 4m sqft ID Manchester are further enhancing the city’s offering in life sciences.
This is where the most desirable, high quality jobs will be found in the years to come and Manchester has a great head start on most other cities, making it more attractive than ever to investors.
The UK Purpose-Built Student Accommodation (PBSA) market is defined by a huge imbalance between supply and demand.
In Manchester’s case, the imbalance is caused by the strength and size of its student body. Its universities are world class and it attracts an extremely high number of international students who are willing to pay for the best accommodation, whether that is PBSA or the regular housing market.
The Centre for Cities notes that these graduates then translate into the wider housing market demand imbalance, with more than half staying in Manchester following graduation. In this way, the student market in the city directly boosts the overall housing market and plays a leading role in its growth.
For those looking to buy property in the city, the fact the PBSA market is such a strong investment prospect is also a key sign for the desirability of private housing here too.
Single family housing
Finally, housing is an area in which Manchester excels as an investment opportunity. Our city is judged likely to see the highest demand for housing in the coming years, and it is all related to the previous categories.
It is no surprise that Manchester will see the greatest housing demand given that it also has the highest prospects for 10-year economic growth and is in the top three cities for employment growth over the same time frame.
The success of Manchester’s economy feeds into its property market. This is the city of investment and that means it is also the city where property investors can find the greatest opportunity.