Manchester outperforms rivals but starts on site drop
Just 20 projects commenced construction in the city last year, the lowest total in a decade, according to Deloitte’s annual crane survey.
The report paints a mixed picture for development in Manchester and Salford. The 27 schemes completed was higher than last year and the number of residential units and amount of office space delivered in 2024 were up compared to 2023.
However, the number of starts on site fell below the 10-year average across all sectors as developers and investors continued to battle headwinds.
Overall, the number of projects currently under construction site fell from 61 to 58 year-on-year.
Despite this, Manchester continues to outperform the other regional cities that Deloitte surveys.
The 20 starts on site the city saw in 2024 was just one fewer than the year before. Meanwhile, Belfast, Leeds, and Birmingham experienced drops of nine, five, and two projects respectively.
John Cooper, infrastructure and real estate partner at Deloitte, said: “You only need to look at the skyline in Manchester to see just how much the city has changed over the last decade, as it has transformed it into a dynamic innovation hub.
“Our survey’s findings demonstrate that despite ongoing pressures and a decrease in new starts, Manchester’s construction sector remains active and is very well placed for further development over the next few years.”
Resi resilience
Manchester saw 11 residential projects break ground in 2024, while 4,400 homes were delivered, an increase of 2,000 units year-on-year.
This means the total number of homes currently under construction is 10,788 – a decrease of around 1,000 on the last two years, according to Deloitte.
No student schemes completed construction in 2024, but the pipeline for this residential subsector continues to expand. Just last week, Manchester Metropolitan University announced plans for 2,200-units at its All Saints Campus.
“Despite economic headwinds and political uncertainty shaping much of 2024, the residential market in Manchester continues to deliver strong results,” Cooper said.
“The city’s commitment to addressing housing needs and the projected completions of approximately 9,000 new homes over the next two years means Manchester is on track to exceed the average annual demand for homes, identified in Greater Manchester policy.”
While the delivery of residential development remains resilient, delays for taller buildings caused by the Building Safety Act could see a downturn in the coming years.
The redevelopment of the Rylands building was one of the big refurb projects to begin in 2024. Credit: via Real Estate Marketing Media
Offices outlook
The amount of office space under construction in 2024 fell significantly year-on-year from 2.2m sq ft to 1.5m sq ft – a 30% drop – indicating the market’s uncertainty when it comes to pulling the trigger on new-build workspace schemes.
The majority of office space under construction in Manchester is now refurb projects, including AM Alpha’s 300,000 sq ft Rylands revamp and Parthena Reys’ 350,000 sq ft One Hardman Boulevard.
A lack of supply coupled with strong demand for offices has driven rents upwards to the cusp of £50/ sq ft. This rental growth is expected to continue given the dearth of grade A space coming forward.
“The shift to hybrid working patterns has created an opportunity to deliver high-quality office space that prioritises collaboration and sustainability,” Cooper said.
“Manchester has certainly embraced this trend whilst seeing a shift towards refurbished offices which represents 68% of the total floorspace under construction in 2024.”
Liverpool not being mentioned on a north west website says it all. The city is going nowhere.
By Jonny
Hi Jonny. Liverpool is not mentioned in the story because the Deloitte survey does not cover Liverpool. Best wishes, Dan
By Dan Whelan
I guess as office space becomes in short supply and more expensive new developments in Manchester will start appearing once again.
I have every confidence that there will be an upturn in apartment and other housing developments as the City’s population continues to to expand.
By Peter Chapman
Sadly there is never enough development activity across Hotels , offices and Apartment builds in Liverpool for it to be included . The reports always make for an interesting read though and reflects the economic climate as well as the local city economy.
By Jon
Good to see the impact of the Building Safety Regulator being noted. Until the process of dealing with Gateway 2 applications is understood by the industry and that we know that the Regulator can handle applications satisfactorily within the 12 week approval process then the resulting delays in approvals will have a significant impact on all buildings being constructed that are 18m and higher (residential, PBSA, hotels etc). It will be a significant contributory factor in slowing growth derived from the construction industry and obviously impact on things like the numbers of homes being built. Forget 1.5m homes in the lifetime of this Government!.
By Anonymous