Manchester residential construction hits highest level since 2006
The number of homes under construction in Manchester has doubled in two years to hit its highest level for more than a decade, while more than 2m sq ft of offices are now being built, according to Deloitte’s latest crane survey.
The survey, which covers central Manchester and Salford, said there were 14,480 residential units under construction during 2018, more than double the 6,963 being built in 2016. Across all sectors, there are 78 schemes under way in the Manchester and Salford core.
More residential units are due to be delivered in the next three years than in the last 10 years combined; between 2007 and 2018, 13,439 units were completed, while between 2019 and 2021, 14,480 units are due to complete.
With 48 residential schemes currently being built, the level of residential construction is also well ahead of the 10-year survey average, which stands at 21 schemes.
Major residential projects to start in 2018 included Renaker’s Elizabeth Tower at Crown Street, featuring 664 units; Capital & Centric’s 201-unit Crusader Mill; the first phase of FEC’s MeadowSide; and Select Property’s Embankment West, featuring 503 units.
Salford has the highest number of units under construction with nearly 6,000 being built, followed by the southern fringe of Manchester city centre where projects such as the city’s current tallest building at Renaker’s Owen Street are being delivered.
The area’s residential pipeline is set to peak next year with more than 7,500 units being delivered.
The office pipeline is also strong with 2.1m sq ft under construction as of the end of 2018, compared with 1.5m sq ft a year earlier. Completions were relatively low last year with only 450,000 sq ft delivered, highlighting the need for additional office space in the city.
Crucially, more than a quarter of the space under construction is pre-let, a significant increase from 10% in 2017. Major pre-lets agreed in 2018 include Booking.com’s 200,000 sq ft campus at Enterprise City, and HMRC’s letting of Three New Bailey in Salford.
The previous peak of office delivery was in 2008, where nearly 1.5m sq ft was handed over.
For student accommodation, delivery is anticipated to boom with nearly 1,800 bed spaces completing either this year or next. Major projects under construction include Unite’s tower on New Wakefield Street, and Downing’s River Street scheme.
The hotel, retail, and leisure pipeline, which peaked last year after increasing rapidly between 2016 and 2018, is anticipated to remain robust with nearly 800 rooms per year to be delivered between 2019 and 2021.
Retail has remained relatively consistent with 310,500 sq ft under construction in 2018, compared with 316,700 sq ft being built a year earlier.
Overall, the number of schemes under construction in 2017 rose by 34%.
At the launch of the Crane Survey, Simon Bedford, partner at Deloitte Real Estate, opened the event by pointing out “if you’d asked us in 2016 what this event would be like, we would have expected to be talking about construction slowing or stopping on some sites”, but despite the national uncertainty, “the economy in Manchester is doing very well”.
While construction indexes have shown a drop off in activity for the UK overall “we’ve not seen that out there, Manchester couldn’t have a reality more contradictory to that.” According to Bedford, all major regional cities showed construction activity as up on 2017, “so it’s worth paying attention to how resilient regional cities are in comparison to that national picture.”