Retail and Leisure
The volume of retail/leisure floor space brought to market each year continues to rise, but the total volume on-site is levelling out from the volume in 2019.
A total of 447,588 sq ft of retail and leisure floor space is currently on-site as part of mixed-use schemes across the Crane Survey area. This is only a 7% decrease from the amount on-site year end of 2020, when 481,800 sq ft was under construction. Both years remain well above the annual average since 2007 (160,000 sq ft).
Of the total floor space under construction, 26% (totalling 116,280 sq ft) started on-site in 2021. A substantial proportion of this (29,945 sq ft) is to be delivered through the refurbishment of Islington Mill, creating an art gallery and events space and cafÃ©. The conversion of New Century Hall into a creative college, with a 1,000-capacity flexible events space and a food hall located on the ground floor, will also deliver 23,322 sq ft of retail/leisure floor space.
The number of retail and leisure completions continues to rise, with 143,848 sq ft of retail and leisure floor space completed in 2021, an increase of 35% from 2020 (106,700 sq ft) and well above the average annual level since 2014 of 64,673 sq ft.
The largest amount of retail / leisure floor space delivered to market in 2021 was within the City Core at developments including The Lincoln (10,000 sq ft), Circle Square (33,000 sq ft) and Kampus (49,000 sq ft). In Central Salford, retail units have been delivered to market at completed residential schemes, including Atelier, The Filaments, and Embankment West, and these will support the large influx of residents to the area in the coming years.
The pipeline for the delivery of further retail and leisure floor space to the market also looks strong with 205,802 sq ft expected to be delivered in 2022, with a further 190,807 sq ft in 2023 and 50,978 sq ft in 2024.
As expected, the area with the largest amount of new space to be delivered in 2022 is also the City Core with 76,318 sq. ft. of retail floor space at developments including London Road Fire Station (37,254 sq ft), Hotel Du Vin (4,232 sq ft) and Maldron Hotel (7,308 sq ft).
St John’s is also set to deliver 60,950 sq ft of new retail and leisure floor space in 2022. With office pre-lets already secured and a strong future pipeline of office and residential development in St. John's, this retail and leisure floor space will provide local amenities to support the creation of a 15-minute city and a vibrant new city centre neighbourhood.
76-82 Oldham Street (20,000 sq ft) will add to the vibrant retail and leisure provision in the Northern Quarter and give confidence to new opportunities in emerging areas like New Cross. In Salford, the delivery of Four New Bailey in 2021 will also provide further ground floor retail (6,028 sq ft) when completed.
Online spending increased from around 9% of total retail sales in September 2011 to about 19% in September 2019 and rose still further during COVID restrictions to 34.5% in March 2020 and then 37% in March 2021. Although the level has fallen as restrictions to shopping in store have eased, online sales have remained high, at 28.1% of all retail sales in September 2021. In response, the redevelopment of department stores offers the potential for renewed and reformatted in-store retail activity at ground floor level, and also provide space for office, hotel, residential and even educational uses. A sustainable and vibrant city is one that is adaptable to change.
However, high streets and town centres are about more than just shopping. Spending on leisure, eating and drinking out is increasing as restrictions are eased, up 6% on the start of 2021 and by 35% from Q3 2020 to Q3 2021. At the same time, there is an increased focus among consumers on localism and supporting independent businesses. This is in evidence at Kampus, Circle Square and Deansgate Square, where many such lettings have been secured by Manchester-based companies, or businesses that have started their journey in Manchester or Salford.
The vibrant independent retail offerings in Ancoats and New Islington will be further supplemented by the completion of units at Lampwick and Mansion House, where all retail units are let to independent occupiers. Elsewhere in the city, road closures and extended outdoor seating in restaurants and cafÃ©s has helped to establish concepts such as Freight Island and Ramona.
Hotels and travel
Compared with construction in the previous year there was a 17% decrease in the total number of hotel beds on-site in 2021
There were 1,975 hotel bedrooms on-site in 2021 across eight schemes, a 17% decrease from last year’s volume under construction of 2,397 beds across ten sites. Many of these 2021 hotel schemes are located within City Core, where there are six schemes on-site comprising 1,525 hotel beds in total.
175 hotel beds are on-site at St John's at Old Granada Studios and a further 275 hotel beds are on-site near Manchester Piccadilly Station at the Leonardo Hotel on Adair Street. The largest hotel scheme on-site comprises Motel ONE and Wilde Aparthotel at St Peter’s Square, which is set to complete in early 2022. This is a dual-operated hotel block, which will be split between 328 rooms operated by Motel ONE and 262 studios and one-bedroom aparthotel units operated by Wilde Aparthotels (part of the StayCity brand).
Two new hotel schemes started on-site in 2021, both located within the City Core: the Treehouse Hotel (216 beds) at the former Renaissance site on Deansgate, and Hotel Du Vin (70 beds). Although these schemes will boosted the supply of new hotel rooms to Manchester beyond 2022 and into 2023, the overall volume of new hotel beds on site has fallen by 34% from 2020.
Both these new schemes are refurbishments by new hotel providers. The Treehouse Hotel will not only provide a new brand into Manchester City Centre but will promote sustainability through both the refurbishment of the existing building (as opposed to full demolition), the use of recycled materials, rainwater harvesting, bee hotel and rooftop garden.
The relatively low number of new hotel schemes means that new supply of accommodation, following five-years of increases in the volume under construction up to 2019, is diminishing. This should be viewed against a large uplift in supply in 2017 and 2018 when five new schemes started construction in each year.
Even so, the 1,759 hotel beds expected to be brought to market in 2022 will exceed the highest-ever previously recorded, which was in the 2018 Crane Survey when 840 hotel beds were completed. Completed hotel schemes during 2021 provided 261 beds at Yotel at John Dalton House, 41 beds at Cotton Yard on Chorlton Street and 164 beds at the Moxy Hotel in Spinningfields.
Overall, the number of hotel schemes which started construction in 2021 is only slightly below the average number since 2007 (2.5 schemes), whilst the pipeline for delivery of hotel beds to the market in early 2022 is very strong.
These hotels are advertised as supporting the ‘millennial traveller’, with Yotel and Moxy brands positioned as high-quality and stylish, yet affordable hotel accommodation and with Cotton Yard providing a flexible aparthotel offering.
As in the rest of England, hotel occupancy rates in the North West fell dramatically from 81% to 48% in 2020. Prior to COVID-19, Manchester had consistent hotel occupancy of over 80%, which supported the appetite for hotel delivery in the region. Although demand is still relatively subdued, occupancy levels bounced back to 76% in September 2021.
Unsurprisingly, the UK’s airports have suffered due to a lack of visitors, but figures from October 2021 indicate that passenger numbers have been increasing gradually. Traffic was at 51% of the pre-pandemic (October 2019) level, due to the easing of travel restrictions and regulations.
In a further boost to tourism, in April 2021 Manchester was voted the best UK city to staycation for summer, and with 37% of people still planning to holiday within the UK in 2022 and more people taking shorter holidays, there should be cause for optimism about attracting visitors. Manchester was also named as the third-best city in the entire world in 2021, behind San-Francisco and Amsterdam. Looking at what makes these cities the best in the world - diversity, culture, and creativity - Manchester has in abundance.
Spending on cultural activities continues to rise and retail, leisure and hotel developments under construction will further support growth in the city’s hospitality offerings and its visitor economy.
Overall spending on cultural activities in Q3 2021 was higher by 29% on Q3 2020 figures and 11% on Q2 2021, while the return of live stadium audiences for football boosted spending on live sports events by 9%. The completion of Factory in 2022 and the Co-op Live Arena at the Etihad Campus will add to the City’s existing excellent culture and sports offering and support a vibrant city centre. Additional supply of hotel bedrooms is needed to support demand for overnight stays during events at major visitor destinations, both existing and under construction.
As major schemes complete, new ‘pocket-parks’ are adding green space to the city and improving the pedestrian environment. Pedestrianisation plans will also link these spaces and further improve the city centre environment, supporting business and contributing to the net-zero target.
In the City Core, enhancements to Lincoln Square are creating public realm that will provide fully pedestrianised links between Deansgate, Queen Street, John Dalton Street and Albert Square. Albert Square is being transformed into ‘one of the finest civic spaces in Europe.’ The first phase of works is due to complete in 2022 and involves the closure of roads to the south and west and extension of the Square.
A riverside park with improved civic space next to the Cathedral will provide further public realm enhancements in the Medieval Quarter. This also includes the recently opened Glade of Light, a memorial to those who tragically lost their lives in the Manchester Arena attack in May 2017.
Also in the City Core, 5.7 acres of new public realm has completed in and around Symphony Park at Circle Square, providing green space for residents and workers in this new mixed-use city centre neighbourhood. New public realm has also been delivered at Kampus and Manchester New Square.
Further space is also under construction at Mayfield, providing a brand new 6.5 acre park in the City Centre prior to the first phase of commercial development being progressed. In the Southern Arc, the All Saints campus area of Manchester Metropolitan University is to be upgraded, providing an improved green space and pedestrian environment at the gateway to the Oxford Road Corridor. Overall, over 25 acres of new and improved public space has been, or is due to be, completed in Manchester city centre by the end of 2022.
Looking forward, a competition has been launched to redesign Piccadilly Gardens alongside separate plans by the National Trust to develop a New York style ‘high-line’ on the Castlefield Viaduct.
Planning has been accelerated to remove through traffic in Manchester city centre and to improve facilities for cyclists. Restaurants were forced by COVID restrictions to spill into streets to remain open, and there is recognition of the opportunity for a café culture across the streets of cities and town centres.
Government lockdown restrictions for COVID-19 have demonstrated the value of local open spaces and green infrastructure, with 46% of people saying they have spent more time outside during the pandemic than before. The delivery of green space and more pedestrian-friendly network of streets continues to be important for creating an attractive city centre to visit, work and live. Overall, the creation of a more locally-focused and independent-driven consumer economy, where all necessary amenities are within easy reach without the use of cars, will be a critical element in ensuring the transition of the region towards net-zero by 2038.