There was a feeling of optimism in the room at the Deloitte Real Estate Manchester Crane Survey this morning, as the figures showed a construction sector recovering more rapidly than expected, and 23 projects on site across the city.
Michele Steel, head of the Deloitte Real Estate Manchester office, led the presentation, which showed total construction schemes up 10% in the period between June 2013 and September 2014 compared to the 2012/13 survey. Of the 23 developments on site, 15 were new starts.
There have been 13 schemes completed since last year's survey, with 325,000 sq ft of office space across four buildings, 390,000 sq ft of education and research facilities, one hotel, 212 residential units, 1,457 student bed spaces, and the completion of the Central Library redevelopment and the Town Hall extension.
Steel said: "With investment activity at record levels, international investment firing into the local economy, and a clear vision to bring the key northern cities together into one economic powerhouse, 2014 has seen continued evidence of the strength of the Manchester market."
Eddie Smith, director of strategic development at Manchester City Council, took to the stage to highlight the importance of long-term thinking for the future of the city, and projected forward to a crane survey in 2035. He highlighted graduate retention as key to the city's success, and said: "What stops graduates going to places like Vancouver, Portland and Seattle, which offer a lifestyle Manchester just doesn't have at the moment. Simply, Manchester actually doesn't have that many interesting places. There is a global race for talent, and we need to respond quickly."
Overview of the Manchester Crane Survey 2014
There is 325,000 sq ft in the construction pipeline, slightly less than at the same time last year. The majority of that has completed through the 268,000 sq ft One St Peter's Square. A key new start in 2014 is the 165,000 sq ft first phase of the Embankment in the Exchange area of Salford, a speculative development by Ask, Carillion and Tristan Capital Partners. Allied London's Cotton Building in Spinningfields is the other new start on site.
Planned projects in the pipeline total 1m sq ft, with schemes such as Noma, 1 Spinningfields, 100 Embankment, 2 St Peter's Square, and 24 Mount Street. The report said: "Whether 1.5m sq ft of new space could be supported is not clear, but speculative office development is back on the agenda, driven by high occupational demand which has increased for a second successive year".
According to the report, residential development is at its highest level in five years with 1,426 units under construction delivered through nine schemes, including phase two of Potato Wharf, One Greengate, and a refurbishment project on Princess Street.
In the first nine months of 2014, planning permission was sought from Manchester and Salford City Councils for more than 3,000 units, with almost two-thirds of these planned homes within Salford. Many of these schemes are billed as for the private rented sector, and are medium to high density.
Hotels, leisure and retail
Four hotels have started on site, which once completed will add 1,088 rooms when combined with the two starts from last year. In regard to leisure, the £25m Home arts centre at First Street remains under construction, as does the £30m redevelopment of the Corn Exchange by Aviva Investors.
Only 20,000 sq ft of retail space has been developed, on the ground floor of other commercial and residential schemes. King Street has experienced a turnaround, with vacancy rates dropping from nine units in February 2013 to six in September 2014.
Education and research facilities
The survey saw the completion of Manchester Metropolitan University's Birley campus and a start on site for the MMU student's union. As part of First Street North, Vita was completed in September and provides 279 studio apartments for students. Following the completion of these schemes, student housing development in the city centre is at its lowest level in five years.
There remains one scheme under construction in the education and research sector after years of driving construction figures, with the 82,000 sq ft National Graphene Institute due to complete next year. A £60m second phase has been announced to complement this site. Citylabs by the Manchester Science Partnership also completed this year, letting 40,000 sq ft of its 90,000 sq ft total to Icon Development Solutions.