The city’s construction costs outstrip the likes of Edinburgh, Glasgow, Birmingham, and Leeds, according to research by Arcadis, with Liverpool also ranking highly.
According to the consultant’s annual International Construction Costs report, Manchester is the 22nd most expensive city in the world to build in, placing it ahead of other regional centres including Birmingham and Cardiff.
In the UK, only London and Bristol have higher construction costs. Liverpool also registers strongly, ranking as the 26th most expensive city for construction, placing it ahead of Edinburgh, Glasgow, and Leeds.
Overall, Manchester is the third-costliest city in the UK for construction, while Liverpool ranks in fifth place.
The statistics will come as no surprise to the Manchester market, which has seen residential construction hit its highest point since 2006, according to Deloitte’s most recent crane survey.
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. Similarly, office construction is on the up with 2.1m sq ft currently under way.
A number of developers and main contractors have reported rising costs across the city centre in particular with the subcontractor market particularly buoyant; residential developers have reported huge demand and increasing costs for finishing trades including decorators as a number of major schemes look to complete.
Issues with subcontractors and costs have reportedly delayed some residential projects, including Murrays’ Mills in Ancoats, being delivered by Graham and developer Manchester Life, which was completed nine months late.
In Liverpool, a booming hotel pipeline and demand for hotel space has driven increased construction activity, while a lack of available office space is expected to lead to a drive in new-build office delivery, particularly at Pall Mall, where Kier and CTP are planning to bring forward 400,000 sq ft of commercial space.
The city is currently the third-best performing hotel market in the country, with further proposals coming forward in the last three months, including an Epic aparthotel at Gambier Terrace, proposals by YPG to convert the Magistrates Court, and a boutique hotel by Elliot Group at Beetham Plaza.
According to the rankings, New York City is the most expensive city in the world to build in, while the UK’s costliest city for construction is London.
The research covers 100 cities globally, and measures 20 different building sectors; the data used in the research was current as of the first quarter of 2019.
Jonathan Moore, city executive for Manchester at Arcadis, said: “In 2019 and beyond, smart investment in three key areas is going to be crucial for future success. Technological innovation and digitization present an opportunity for construction companies to increase efficiency, lower costs and raise productivity, while simultaneously improving the end product for customers and communities alike.
“Secondly, in order to create long term value there needs to be a much stronger focus on how the buildings we construct can work for and meet the changing requirements of the people who actually live in or use them.
“Finally, constructing and operating buildings has a significant impact on the environment, in terms of water and energy use, carbon emissions and waste. As a consequence, clients are looking to incorporate resiliency and sustainability into building design and use as part of their business and growth strategy. These key areas all require the whole supply chain to collaborate more deeply to deliver the potential value in the investments being made.”