DJD: Public sector schemes driving city recovery

Michael Hunt

Several new public sector schemes on the horizon in Manchester could kick-start the city's recovery from recession, according to a new survey.

Within the 12th Manchester Crane Survey, which is produced by Drivers Jonas Deloitte, it highlights the important role the public sector plays as it continues to be a 'driving force' in the city's development.

In particular, the consultancy highlighted schemes such as the redevelopment of the Manchester Metropolitan University, the proposed Mayfield civil service campus near Piccadilly and the new buildings at Chetham's School of Music as significant examples.

The Crane Survey did, however, reveal that the city's office and residential markets have continued to suffer following the start of the economic downturn.

The impact of the recession has meant that just 30 residential units are scheduled to complete in the centre of Manchester over the coming year, down from a high of 2,050 in 2009.

Drivers Jonas Deloitte also said that the volume of sales is now gradually increasing, although many investors have preferred to let their properties until the sales market improves.

The public sector is expected to boost the residential market's revival, with the consultancy highlighting two previously stalled schemes, Northerngroup's Ice Plant and Artisan's scheme on Blossom Street, that are expected to benefit from the Homes & Communities Agency Kickstart funding.

The Crane Survey reveals a similar picture of low development activity for Manchester's office market, identifying that just four office schemes which are set to complete in 2010, are less than half the amount seen last year.

With the availability of office accommodation remaining high, Drivers Jonas Deloitte said that headline rents could continue to fall this year but that with a limited office development pipeline, values could firm up once supply diminishes.

In addition, the Crane Survey outlines that the quality of stock, with 1m sq ft of commercial space available being Grade A, has good prospects for being let quickly once the economic recovery gathers pace.

The consultancy believes that private sector investment will be slow to return and identified life sciences and bio-medical research, office space and commercial refurbishment projects as areas for potential growth.

Despite the anticipation of public spending cuts and the uncertain outcome of the forthcoming general election, Drivers Jonas Deloitte said that the current pipeline of large publicly funded development will continue to bring the city forward.

John Adams, head of Drivers Jonas Deloitte in Manchester, said "There are very few places outside of London that can boast such an exciting and robust public sector development pipeline.

"These large scale investments demonstrate a huge level of confidence in the city region's ability to continue to grow and prosper."

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