Manchester: a key city of the Northern Powerhouse
Manchester is one of the Northern Powerhouse ‘key cities’, with the population of Greater Manchester now over 2.55 million. A study by online estate agent HouseSimple showed Manchester at the top of the ten locations in the UK where property prices were likely to increase substantially. Peter Armistead of Armistead Property was quoted as saying that Manchester “has an amazingly vibrant restaurant, bar, club and music scene, not to mention its galleries and museums. It’s not surprising that many investors, especially from the South, are targeting Manchester as a great place to invest.”
So what is happening in Manchester at the moment?
Office space take-up soar
According to fresh figures from Bilfinger GVA, more than 370,000 sq ft of Manchester city centre office space was let between July and September 2015. Office take-up in Manchester city centre was almost 50 per cent above the five-year-quarterly average between July and September.
Manchester now has the highest level of office uptakes outside of London, with a total of 373,477 sq ft in the third quarter of 2015. This has been driven by pre-let activity at Allied London’s 160,000 sq ft XYZ Building in Spinningfields, which is due to complete next year.
Chris Cheap, senior director in Bilfinger GVA’s Offices team, said: “The juggernaut that is occupational demand in central Manchester continues on at great pace with both pre-let activity as well as the absorption of a diminishing supply of built and available prime space.” He also mentioned that, “This continued activity firmly underlines the view that Manchester is at the forefront of the UK Core City movement and will be the metaphorical engine room of the much heralded Northern Powerhouse.”
Urban and Civic have submitted plans for a new scheme in Central Manchester. The scheme would be located on the corner of Princess Street and Whitworth Street within the city. This would include two residential buildings comprising 238 apartments, a 148 bedroom, 4 star hotel, ground floor commercial units and a new landscaped public square over the existing four-level basement car park.
Andrew Lavin, Development Manager for Urban & Civic, said: “This is an exciting new mixed-used development that will transform a key city centre site that has stood derelict for over a decade.” Subject to planning permission being granted, work would start on the initial phase of residential buildings in summer 2016, with the first new residents moving in 20 months later.
Travelodge are also involved in the growth of Manchester by exchanging contracts for two new hotels in Greater Manchester with an investment of £9m which will generate 45 new jobs. Further plans to open seven more hotels in the area, representing an investment of £35m, will hopefully create 200 more jobs. Travelodge Managing Director of Property Paul Harvey said: “Manchester is at the forefront of the UK boom and is a key growth area for Travelodge.”
Contractor FK Group have also won a £3.7m deal to work on the £20m ‘Tomorrow’ development being created at MediaCityUK, a new waterfront destination for Manchester. ‘Tomorrow’ will create 56,000 sq ft of office and studio space designed to meet the increasing demand for the fast-growing creative and digital industries locating to Manchester. A 112-bed Premier Inn hotel will be located above the offices servicing the increasing needs of the number of people visiting the fast-growing destination.
Further to this, Landmark city centre site, the Great Northern Warehouse, is set to become a 780,000-sq-ft mixed-use quarter with retail, restaurants, offices, a cinema and residential property. Around £300 will be pumped into the Great Northern Warehouse in a bid to re-invent it as a ‘world class’ residential, commercial and leisure quarter for Manchester. Tony Yeung, managing director of Peterson Group, said: “By creating a world-class destination for employment, leisure and high quality city centre living we believe we will enhance Manchester’s recognised competitiveness both nationally and internationally.”
A joint venture between The Co-operative Group and Hermes Investment Management for over 350,000 sq ft of grade A office space over nine and eleven stories also includes restored listed building, making it one of Europe’s largest heritage-based regeneration schemes.
The scheme, named NOMA, is also set to revamp Victoria station with an investment of £44m, as well as the Metrolink second city crossing. Ben Tolhurst, Asset Manager at Hermes Investment Management, said: “We are seeing steady growth in Manchester’s commercial appeal. Should these two developments achieve planning permission, it will be an important stage in transforming the city and creating a commercial destination for global businesses.”
London investor, Chris Perkins of M&G Real Estate, has already spent £500m on property in the North West and has confirmed that he will acquire more. Chris said: “We are big believers in the Northern Powerhouse, it’s a very compelling argument for investment, and investing in the Manchester region provides us with the kind of returns which is now hard to get in the fuller-priced property market of the South East.”
Parks located close to Manchester Airport, which have generated the region’s most encouraging rental values, including Atlas Park, Concord Business Park and Manchester Business Park, have all reported increased levels of enquiries from European occupiers. Swiss agricultural business ‘Syngenta’ have taken 33,000 sq ft at The Towers in Didsbury, South Manchester. David Thwaites, associate director at Bilfinger GVA, said: “It is encouraging to see that business park take up across the North West has remained strong in the third quarter of 2015.”
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