Residential sector driving ‘record levels of development activity’ in Manchester, reveals Crane Survey has been saved
Residential sector driving ‘record levels of development activity’ in Manchester, reveals Crane Survey
5 February 2019
- Number of residential units delivered at highest levels since 2006
- Over 2 million sq ft of office space under construction
- Over 1.1m sq ft of education and research space being brought forward
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 Manchester Crane Survey reveals 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 per cent 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 over 2 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. A total 25 per cent of all office developments on site in 2018 were pre-let, increasing from just 10 per cent 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. Investor confidence is booming, as the rise in pre-let deals clearly demonstrates.” continues Bedford. “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 over 100,000 students currently attending university in the region and the highest number of purpose-built student accommodation underway 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.
Bedford finished: “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.”
Note to editors
About the Manchester Crane Survey
Deloitte Real Estate’s Manchester Crane Survey is the definitive review of construction and is seen as a barometer of developer sentiment and future supply. This report measures the volume of development taking place across Manchester and its impact. Property types include office, retail, leisure, residential, student accommodation, education and hotels. The areas covered in the report are: Central Manchester, Salford (including the corridor), and includes insight from developers building new schemes or undertaking significant refurbishment of the following:
Office - 10,000 sq ft,
Retail - 10,000 sq ft,
Residential - 25 units,
Education, leisure and hotel schemes - significant scheme for inclusion.
The report is carried out by Deloitte’s in-house real estate team in Manchester who have monitored construction across the city. Deloitte’s field research is then verified with direct industry links and in-house property experts. The last edition was released in January 2018. The report covers the period from 13 January 2018 to 11 January 2019 and data goes back to 1999.
Deloitte Real Estate’s commercial property research team is focused on producing thoughtful and insightful publications, as well as comprehensive bespoke reports for investors, developers and occupiers. www.deloitte.co.uk/cranesurvey
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Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.
The information contained in this press release is correct at the time of going to press.
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