North West economy is booming despite Brexit

Property Investment:

CBRE in Manchester, the international property consultants,
has announced that 2018 was a record year for deals in the city, with the company
having advising its clients on over £1.5bn of commercial real estate investment
transactions.

More than 40 individual large-scale transactions were concluded
by the company’s Manchester team over a wide-range of sectors which included
retail, office, logistics, leisure and healthcare, and demonstrating the underlying
health of this North-west economy.

New Developments:

During the year, CBRE advised Bruntwood in securing L&G Capital as a joint venture partner to create Bruntwood Sci-Tech, the UK’s largest property platform dedicated to driving science and technology growth in the regions. The partnership has already led to a £360m investment of capital, property and intellectual assets into the new venture.

L&G has also committed to buying the entire West Tower development
on its completion due in May, which will provide 350 residential apartments,
along with 150 parking spaces and communal residents’ lounges.

Colin Thomasson, executive director and head of capital
markets at CBRE in Manchester, said:

“Our transactional activity reflects the continued
attractiveness of Manchester and the wider North West region.

“Notwithstanding the challenges presented by Brexit, our
local economy is thriving and demand from investors and occupiers remains
strong.

“As Manchester continues to grow it is becoming more
attractive to a range of different businesses in the tech, digital, fin tech,
health innovation, creative, film and media sectors, and this will ultimately
sustain investment over the long term.�

Other Developments

All this is reflected in some of the major lettings
confirmed over the last year including Booking.com at Enterprise City, and
Qiagen at CityLabs. It is expected that major lettings will continue in 2019.

 A number of other high
profile announcements include HPE at Circle Square, the Booking.inc. at St
John’s, plus WeWork at Dalton Place, HMRC at 3 New Bailey, and Amazon at
Hanover House.

In addition, three more schemes at Old Granada Studios,
Bonded Warehouse and ABC are being delivered at St. John’s by Allied London and
are part of larger mixed-use schemes that include studio space for the
creative, digital and media industry as part of the Enterprise City initiative.
The University of Manchester’s new Graphene Engineering and Innovation Centre
(GEIC) represents a further £200m investment in the city.

Considerable investment in education and research projects,
such as Corridor Manchester, the (1.1m sq ft), the Graphene Centre and the
Manchester Engineering Campus, supported by a community of over 100,000 students
currently attending universities 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 is also seeing record activity, with the
number of hotel rooms under construction in 2018 at 1,963 new bed spaces. In
total there are nine new hotels are under construction, four of which are in
the city centre, two are located within NOMA and the Northern Gateway and one
within the Southern Arc.

As the boundaries of the city centre expand, the strength of
the business visitor economy goes with it, positioning the city as a world-leading
conference destination. Coupled with improvements to the travel infrastructure
and public attractions, the outlook for Manchester’s tourism industry is also very
strong.

Manchester airport has direct and daily flights to many
international destinations including New York, Tel Aviv, Los Angeles, Beijing and
Mumbai, an indicator of the city’s growing international connectivity.

The pipeline for all developments remains strong in 2019
with new starts anticipated including the new QBIC hotel at John Dalton House.

New Businesses

Figures just released from the ONS show that, as of 2018,
there are 23,845 businesses in Manchester, a rise of 58% from 15,060 in 2014
with a rise in more than a thousand businesses in the past 12 months alone,
from 22,490 in 2017.

Retail is the most popular type of business across
Manchester, followed by 4,215 businesses in the professional, scientific and
technical industry, ahead of 1,805 companies in the property sector.

The rising numbers seen in the city of Manchester over the
last four years reflect the national trend, which also shows a decline in peripheral
towns such as Trafford, Wigan and Stockport where numbers have fallen, by 470,
195, and 130 businesses respectively.

Residential
Development:

The residential sector has continued to achieve record
levels of development in Manchester for a third year running. Forty eight
residential schemes were in progress last year, up from 41 in 2017, and they
are set to deliver 14,480 residential units in the city.

Anyone visiting Manchester lately cannot fail to be surprised
at the sheer number of cranes on the skyline, and according to accountant’s
Deloitte Real Estate division its annual Manchester Crane Survey it showed over
3,345 units were under construction, compared to the same time last year. The projected
delivery over the next three years will be greater than the total number of
residential units delivered between 2007 and 2018 says Deloitte.

Several build-to-rent schemes in Ancoats and New Islington,
including Manchester Life’s Smith’s Yard and Sawmill Court, Mulberry’s The
Astley are bringing record numbers of residential units to market. Five more
such schemes were completed in Salford, including Slate Yard Wharf and
Middlewood Locks, while more residential development starts in 2018 included
Select Property Group’s Embankment West, FEC’s Mount Yard, Renaker’s Elizabeth
Tower at Crown Street, and Capital & Centric’s Crusader Mill.

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 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� said
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.�

Greater Manchester Chamber of Commerce

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