Manchester Crane Survey: cultural sector booms, residential declines

Deloitte’s research found the amount of leisure and retail space delivered in 2022 increased by 12% compared to the previous year. Meanwhile, the residential sector saw its first decline in seven years with 2,724 homes delivered to the market.

Deloitte published its yearly Manchester Crane Survey, which monitors developments across Manchester and Salford and their impact, this morning.

John Cooper, partner at Deloitte, reflected on last year and what it means for future developments.

“As in previous years, Manchester is showing positive levels of development as we head further in 2023,” Cooper said.

“Despite economic headwinds there is much to be excited about, with a strong development pipeline promising key investments in green economic growth and enhanced resilience.”

Transport will be a key focus in the future, with sustainability at the centre of Manchester’s strategies, he said.

Cooper added: “As the city council aims to reduce car-based trips into the city, continued investment into cycling infrastructure, enhanced walking and cycling routes and the ongoing process of removing cars from the city centre will all be priorities.

“Other, larger scale projects will help to further consolidate this, including planned expansions to the Metrolink and expanding Greater Manchester’s greener modes of transport.”

Leisure, tourism and hospitality

Manchester’s cultural sector thrived last year. More than 162,000 sq ft of retail and leisure space completed in 2022, representing a 12% increase from the year before and a 52% increase from 2021.

Another 381,000 sq ft of leisure and retail space is currently under construction. This includes the 143,000 sq ft arts and culture venue Factory and the Co-op Live Arena, set to open in December 2023.

Joanne Roney, chief executive of Manchester City Council, recognised the impact of these cultural attractions on tourism:  “As a city, we’re incredibly proud of our strong cultural ties, providing a diverse and vibrant destination for people from around the world. 

“The last few years have only worked to solidify this, with work underway on major cultural attractions including Factory International, Co-op Live and the completion of the Mayfield park ensuring Manchester remains one of the UK’s most exciting destinations for tourists and residents alike.”

With eased travel restrictions and increasing numbers of tourists, Manchester’s hotel market transformed.

A record delivery of 1,504 hotel rooms in 2022 almost matches the 1,594 delivered in the previous three years combined.

Commercial offices

A total of six completed office developments delivered 702,000 sq ft of office space across Manchester and Salford in the past year. 

In particular, Enterprise City contributed 402,900 sq ft in the St John’s area. The district’s Globe building is home to global media giant WPP.

A further six office developments remained under construction, which are set to deliver a further 1.7m sq ft. this is above the 15-year average of 1.1m sq ft.

The increase in hybrid working patterns has increased the demand for more flexible office use. 

John Cooper reflected: “With many companies now choosing hybrid working models, it’s encouraging to see such a strong pipeline of office space development driven by a desire for more flexible office space utillisation, enhanced environmental credentials, and overall quality of employee experience.”

The push for ESG has also had an effect. Although new-build offices are dominating the market, 11% of office space currently under construction are refurbishments as owners try to minimise embodied carbon and future-proof their properties. 

Cooper added: “… as new EPC minimum requirements hit commercial offices in 2025 and again in 2027 as well as 2030, the ESG credentials of existing office spaces is likely to only further increase, particularly as owners are compelled to retrofit and decarbonise their existing estate.”

Residential

Despite the decline in the number of homes delivered to market in 2022, Deloitte highlighted that the 11,759 homes currently under construction will ensure a steady flow of homes being delivered over the next three years.

Salford City Centre was the leading area for residential development.

The £2.5bn Salford Crescent progressed with its first phase last year. The masterplan will bring 950 homes to Salford’s centre.

Cooper recognised city centre residential schemes as a more sustainable way of living. 

He said: “An increase in city centre living means people’s commutes are shorter and they have access to more sustainable modes of transport. 

“It’s helping to facilitate a more sustainable way of living and driving a reduction of CO2 emissions per capita across Manchester.” 

Student accommodation saw an 18% increase from 2021, with 582 beds delivered to students in the city. However, this looks set to slow down with no purpose-built student accommodation schemes started or in the pipeline.

Education

On the contrary to student accommodation, higher education facilities showed no signs of slowing down with 263,000 sq ft of floor space delivered. 

A further 306,000 sq ft is also in the pipeline, to be completed in 2023.

Notably, Manchester Metropolitan University is undergoing a long-term programme to upgrade its city centre campus by demolishing some outdated properties, building new, and refurbishing old ones.

MMU’s regeneration of the Manchester School of Art is scheduled to complete in spring 2024. Located on Oxford Road, the facilities provided will help to solidify the Oxford Road corridor as a world-leading research hub.

Want more insights into development scene in Manchester and Salford? Read the full Deloitte Manchester Crane Survey.