savills blog: Manchester – The emergence of the Northern Powerhouse

Manchester – The emergence of the Northern Powerhouse

Over the past few years Manchester has firmly established itself as one of the UK’s most dynamic cites for investment, boasting increasing office take up and benefiting from rising house prices we outline some of the key reasons why Manchester is proving attractive to home-grown and overseas investment.

Affordability

Manchester has long been regarded as an affordable city to live in, property prices have only just returned to their pre GFC levels with growth over the past three years in the residential sector touching 30%.  As a destination for National and Multi-National Businesses Manchester offers advantages to London in terms of both staff and property costs, with the peak commercials rents at roughly £35/psf compared to London where the average is closer to £125/psf.

Education

Manchester offers a world class network of higher education colleges and four Universities.  The University of Manchester established in 1824 is one of 11 UK universities recognised in the top 100 globally.  The city enjoys a 51.5% graduate retention rate (*HESA Leavers Survey 14/15)  Other universities include Manchester Metropolitan University, The University of Salford, University of Bolton and The Royal Northern College of Music.  In all the City has around 99,000 university students, including 41,000 international students.

Infrastructure Investment

Manchester is set to undergo an infrastructure renaissance with £1billion being spent on improving and enlarging Manchester airport, already the UK’s second busiest airport for long haul travel offering direct flights to North America, the Middle East and the Far East.  High Speed rail will also be delivered to Manchester, with the UK Government committing to HS2 a high speed line from Manchester to London which promises to reduce journey times between the two cities to 1h 8m down from just over two hours currently.  These significant investments are part of wider plans through the Northern Powerhouse initiative which promises to connect the great cities of the North of England in a way not achieved before to offer a genuine counter balance to London for business, innovation and skills creation.

savills blog: Manchester – The emergence of the Northern Powerhouse

Airport City - one of the largest develoment schemes in the UK with offices and logistics.

Supply v Demand

Manchester has suffered from a systemic under supply of new housing, with council targets for new build completions only met in two out of the last 15 years just prior to the GFC.  The council targets just over 10,000 new units a year, currently the market is delivering short of 5,000 units with a pipeline for the next three years unlikely to deliver any more.  View this against the growth in population, which saw 10,000 people move to the city between 2014 and 2015 and the problem becomes acute. 

Entertainment and Culture

Manchester has something for everyone from global retail brands like Selfridges and Harvey Nichols to world class restaurants like The Ivy which is due to open shortly.  But there’s more, step off the main through fares into areas like the Northern Quarter and Castlefield itself and you’ll find artisan bakeries, independent shops alongside excellent bars and restaurants making a haven for foodies and shoppers alike.  The city is of course famous the world over for sport, in particular football and Manchester United.  Of late the Middle-Eastern owners of cross-city rivals Manchester City have contributed much to the fabric of Manchester with significant investment not only in the football team but in wider Manchester projects like Airport City and Manchester Life.  Manchester hosted the Commonwealth Games in 2002 which brought with it numerous new sporting facilities and in continuing the legacy from these games it’s now the National home to sports like cycling, basketball and squash.  It’s estimated that in 2017 Manchester is home to 1,000,000 residents actively engaging in sports every week. 

In conclusion

A global approach to business and investment has been at the heart of Manchester strategy for over a decade now and its certainly paying off.  The city enjoys the highest levels of FDI outside of London with new entrants from around the globe looking to invest.  The Manchester economy is the second largest in the UK by GVA and this looks set to continue.

Manchester is a vibrant and ever changing city; it offers something for everybody be it good restaurants, excellent job opportunities or world class shopping.  A city on the up, and an excellent place to invest.

Thomas McAlister, Head of International Residential Savills Hong Kong, interviewing Jamie Adam, Head of Residential Development, Manchester Savills UK

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