“Brexitproof Manchester” – Market Commentary August 2019
Each month, CERT gives its views and insights on the North West property market, the latest trends and the latest places where we are considering investing. This month we shift focus back to Manchester market and its growing momentum.
2018 was an outstanding year for Manchester’s commercial property market which retained the number one position of office take up across the Big Six Regional Cities (Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester).
With new office space taken up predominantly by large companies relocating to the Manchester area, a trend in the city which has continued to grow since 2018. Resultantly, Manchester has seen a massive surge in job creation.
In 2018, 1.75 million sqft of office space was transacted in Manchester across 314 deals, up by 54% on the 10-year average.
2018 top deals included:
Booking.com – 225.000sqft
HMRC – 157.000sqft
Amazon – 89.000sqft
WeWork – 76.000sqft
Manchester City Council – 33.000sqft
The trend has continued throughout 2019 with a recent deal (June) by The Hut Group, which took up 280,000 sqft and Britsh Telecommunication lined up for over 200,000 sqft office space in Manchester centre in Q3 2019.
The sudden job creation and growing population has seen a massive boost in the residential market as demand for homes continues to rise with expected house prices to go up by 57% by the end of 2028.
Since 2015, the city’s population has grown by nearly 6%, according to Manchester City Council. An impressive 65% of graduates of universities in Manchester stay in the city after graduating. Additionally, 36% of people from Manchester who studied elsewhere returned home after graduating. Many young professionals also choose Manchester to seek employment as the city offers rich and diverse opportunities across all sectors.
Recent announcement about Therme Manchester investment, a 28-acre well being resort in Trafford, which brings together the tradition of the ancient Roman spa with an indoor tropical paradise, Manchester continues to show the world that it is becoming a global city to rival many European capitals and major US cities.
Manchester’s growth and emerging status as a global city provides all the ingredients to ensure the city remains brexit-proof and continues to grow even through political and economic uncertainty. Brexit negotiations seem to make very little impact, if any at all, on the property market as overseas investment, mainly from Asia and the Far East reaching the highest level this year.
Howard Lord, Managing Director of CERT property comments: “With a growing population of young professionals and students, we have identified the ever increasing need for accommodation in areas of Manchester with good transport links, relatively affordable rents and amenities on the doorstep. These areas offer potential for long term demand and continued growth in values. Our project Kinetic in Old Trafford, is a good example of this. Located opposite the brand new United Academy 92, it has proved to be very popular. The scheme sold out off-plan and set to complete later this year. It is already attracting a lot of rental interest due to high demand for modern and affordable homes which offer great transportation links and local amenities. Off the back of the success of this scheme we are about to commence development of the site next door for another residential development, called Insignia”.
Howard Lord, adds: “We are very lucky to be living and working in this vibrant city which has so much to offer. Ideally located, continuously outperforming the wider UK property market, delivering generous returns for investors and attracting more and more professionals, it is clear to see that Manchester is becoming an irresistible city to live, work and invest.”
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