Manchester Crane Survey 2023: Office delivery drops, resi remains stable

While residential completions stayed steady year-on-year, the amount of workspace delivered in the last 12 months decreased by 320,000 sq ft compared to 2022, according to Deloitte’s annual study.

In 2022, 700,000 sq ft of office space was introduced into the market. Last year saw a drop off in workspace completions, with 381,000 sq ft delivered against a turbulent economic backdrop.

Workspace worries?

Mel Wilson, director in real assets advisory, said: “Although completions were somewhat slower in 2023 than the previous year, the pipeline for the next two years is incredibly strong.

“We’re seeing a continued demand for amenity-rich Grade A offices across the city. Clearly, the increase in hybrid working models following the pandemic means there is greater demand for improved office spaces and amenities.”

Despite the drop off in completions, the office pipeline in Manchester has increased in the last 12 months from 1.7m sq ft in 2022 to 2.2m sq ft last year.

Of all the floorspace under construction in 2023, most of it was refurbished.

The 1.2m sq ft of second-hand office space makes up 53% of the pipeline. This is the first time since the crane survey began that refurbishments have overtaken new-builds, according to Deloitte.

In 2022, refurbished space accounted for just 21% of the total.

“The large volume of refurbishments and listed buildings reflected in the figures is also testament to the value and continued strength of Manchester’s cultural heritage,” Wilson said.

“This development trend can also have significant sustainability benefits, particularly in terms of reduced embodied carbon. Developers and landlords are facing pressure to ensure that their buildings achieve a minimum EPC rating of B by 2030, meaning refurbishment and new-build schemes alike are aiming to hit ambitious environmental goals.”

MEPC’s 4 Angel Square completed last year. Credit: via Influential

Resi remains stable

Away from offices, a total of 2,402 new homes completed across 10 schemes in 2023, down slightly from 2,724 in 2022.

Of these, more than 1,000 were in Salford, thanks largely to Cortland at Colliers Yard, the 559-apartment project that wrapped up in October.

There are currently 11,764 homes under construction in the crane survey area.

In Manchester, Renaker’s 414-home Blade at Great Jackson Street completed. A further 441 homes are due to be delivered at Three60 in 2024.

“Residential development has remained at the core of Manchester’s evolving skyline,” Wilson added.

“For instance, it’s seen the transformation of the Great Jackson Street area from surface-level car parks to iconic high-rise residential destinations which are now a significant feature within the city centre.

The number of new residential starts on site in 2023 dropped from 17 to seven year-on-year.

“The consistent delivery levels over the last two years are likely reflective of a steadier trajectory of housing delivery, following a ‘boom’ period between 2019 and 2021,” Wilson said.

“However, the number of units under construction in 2023 is well above the average of 6,349 units for the period since 2002.”

Cortland at Colliers Yard delivered 559 apartments. Credit: PNW

PBSA pipeline

The crane survey, which covers central Manchester and Salford, also notes that zero student beds were delivered in 2023.

However, three PBSA schemes totalling 2,153 beds started on site last year and several applications for student schemes, including the long-awaited redevelopment of Hotspur Press, were submitted in 2023, bolstering the pipeline.

Jennifer Chatfield, manager in real assets advisory, said: “The sharp increase in purpose-built student accommodation schemes coming forward in 2023 will allow the city to continue accommodating its growing student population, which forms an important future talent pool for businesses.

“With the number of university applicants expected to increase significantly by 2030, there is a need for the city to continue responding to a demand for student accommodation. The continued investment in educational spaces will allow the city to remain at the forefront of innovation and educational excellence, ensuring that the city’s universities continue to attract some of the best talent from around the world.”

Cultural coup

A highlight of the year was the completion of the much-anticipated Aviva Studios venue. This injected 143,000 sq ft of leisure and cultural space into the market.

In total, 245,652 sq ft of hospitality and leisure space was brought to market in 2023 and 1,210 hotel beds are currently under construction, according to the crane survey. No hotel rooms were completed in 2023.

Cllr Bev Craig, Leader of Manchester City Council said 2023 had been a “stand-out year for Manchester”.

“The evolution of Manchester’s city centre continues at pace, with new neighbourhoods emerging and progress on lots of new residential and commercial developments. A highlight of 2023 of course was the opening of Aviva Studios, which added another world-class venue to our already rich cultural offer.”

She added: “We have also seen continued progress on growing the city centre with new neighbourhoods, perhaps most notably at Victoria North, which will create 15,000 new homes in the largest renewal project Manchester has ever seen.

Aviva Studios completed this year. Credit: Marco Cappelletti

“As we look forward, a key challenge remains: to extend the undoubted success we have witnessed in the centre out into our communities beyond the city centre. To this end, we are already progressing exciting plans for district centres including Wythenshawe Civic Centre, Moston, and Gorton. Guided by our recently refreshed Economic Strategy, we will continue to build on this momentum in future years, to ensure that every resident can benefit from the city’s success.”

Since 2018, 178 projects have delivered 22,000 new homes, 3.5m sq ft of workspace, nearly 4,000 hotel rooms, and 1.7m sq ft of education floorspace.