Manchester's booming with construction up 40% on last year

Construction is on the up across Manchester with the city experiencing increased levels of investment, according to the results of a new survey of development activity in the city.

The Manchester Crane Survey 2016, produced by Deloitte, measured the volume of development taking place across central Manchester and was conducted between 1 November 2015 to 8 January 2016. Residential development is dominating development activity with delivery almost doubling from last year. The volume of residential units is the highest since 2008. The anticipated activity of units for 2016 is at 2,175, which is almost 400 units higher than the pre-recession average and is a level of residential delivery that is unmatched by any other regional city.

John Cooper, director at Deloitte Real Estate, said: “Last year, there were 1,426 units under construction within the study area, which meant levels exceeded the 2002-2014 average and highlighted strong signs of recovery for the residential development market. This year, the question was whether this level of growth could be sustained, or if development was being artificially bolstered by the HCA (Homes and Communities Agency) and Built-to-Rent funding unlocking schemes such as Nuovo, Smithfield Square, The Point and Greengate.

“In short, there’s nothing artificial about Manchester’s ability to induce residential development – it is clearly being seen as a place to invest,” he said.

The survey revealed that there was no new Grade A office space completed in 2015, which has driven rents up somewhat; however on the plus side, 1.04 million sq. ft. of Grade A office space is currently under construction which is the highest since 2008 and compares favourably with last year’s figure of 325,000 sq. ft.

Hotel development is also on the up in the city and set to see the most rooms completed since 2007. Future prospects are good too with 307 rooms and 472 rooms expected to be delivered in 2016 and 2017 respectively, as Manchester develops a growing reputation as an international travel destination.

The high level of construction across the city is being driven by five major schemes - No 2 St Peter’s Square, One Spinningfields, the XYZ Building, 101 Embankment and One New Bailey. The steady growth of 2013 and 2014 has continued into 2015, the survey reveals, with the number of new starts up by 40% on 2014. A total of 20 major schemes that were highlighted as key projects in the last Manchester Crane Survey have now been delivered.

Manchester has a healthy project pipeline and the local economy will continue to go from strength to strength if current trends continue, says the survey. Such sustainable growth will position the city well to secure better devolution growth packages from central government, according to the survey. 

Manchester’s recent success, both politically and commercially, further highlights the city’s reputation as a key hub of the North West region. It will be interesting to see how the city adapts to the changing political landscape of devolved power and the Northerrn Powerhouse agenda and whether it can continue to attract current levels of investment once it is in control of its own fiscal economic policy.

Full details of the Manchester Crane Survey 2016 are available here.