Manchester development ‘outperforming all regional rivals’

Deloitte Real Estate has published its 2013 Crane Survey, revealing that there are 19 new developments under construction in Manchester city centre, over three times more than the number of starts in 2012. The total number of projects under construction is 21.

The Crane Survey research assesses construction activity across five of the major UK regional cities, Manchester, Birmingham, Leeds, Edinburgh and Glasgow, with particular focus on a number of key sectors.

In 2012, there were just six new start projects in Manchester.

The 21 developments underway at present will contain 961 residential units, 1,246 student beds and 342,500 sq ft of office space, of which 33% is already let.

There were 19 new starts in 2008, which puts activity levels in the city at their peak since before the economic crisis.

Michele Steel, director at Deloitte Real Estate, said: "It is really encouraging to see that Manchester is building again and leading the way in terms of regional development. Our closest competition in construction terms is Edinburgh and there are only nine projects on site in the Scottish capital."

The upturn in residential development was predicted in Deloitte Real Estate's 2012 Crane Survey, where it cited that funding for a number of new schemes had been secured through the Government's Get Britain Building initiative. There are now spades in the ground at eight new developments located in the Salford Fringe, Northern Quarter and Ancoats areas, representing the largest residential construction volume since 2009.

Of the office schemes on site, only one is dedicated office space – the other two are part of mixed-use developments. There are no new large wholly speculative developments that will deliver new space to the market but with only a handful of properties offering new floorplates of more than 10,000 sq ft, it is anticipated that demand will start to drive the construction of further projects.

Steel added: "St Peter's Square is going to be a key area to watch in the coming months. We expect to see movement on Fred Done's 2 St Peter's Square scheme, 162,000 sq ft of new Grade A space; completion of Argent and GMPVF's One St Peter's Square with occupation by KPMG by Q2 2014 and full opening of the refurbished Town Hall and Central Library to follow. With consent being given for the Metrolink Second City Crossing, the square is set to see unprecedented investment that will mark it out as the next prime Grade A city centre location."

While there were no new starts on site in 2012 for student accommodation, two new student housing construction starts were recorded in the 2013 survey, which will create 1,246 new bedspaces in 2014. The largest scheme is being delivered as part of the Birley Fields Campus by Manchester Metropolitan University that will provide 967 beds across a mix of townhouses and flats. Vita's development will deliver 279 luxury studio rooms targeted at the student market as part of the First Street masterplan.

The hotel and leisure sector remained buoyant with activity levels supporting Manchester's status as a prime business visitor and tourist destination. Two new hotels completed construction in the latter half of 2012 adding 343 rooms to the Manchester hotel market and though no new hotel space will be completed in 2013, three new schemes have started construction during this year's survey. Two of these are standalone sites and the other is part of the First Street North development, bringing the total number of bedrooms under construction to 633.

Steel concluded: "Though full economic recovery is still a long way off, confidence is definitely starting to return to the city. There are several factors that could be attributed to the surge in activity and I believe our excellent sports offering, successful business community and the quality of our educational institutions play major parts.

"The next 12 months will be extremely interesting as the skyline of the city changes shape. The construction industry in Manchester is optimistic and though developers are still quietly cautious, we are already aware of several projects with planning permission or those being prepared for planning that should see even more space on site come 2014/15."

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