As the economy continues to recover, there is a renewed optimism in the property market and this looks set to remain throughout 2015. As new developments take shape we are tracking a number of trends which will have an effect on how schemes in the North West are marketed in the coming year, writes Phil Mayall.
2014 has seen a continuation of the seemingly unstoppable trend of relocations into city centre buildings and 2015 will undoubtedly see more of the same. Human Resource departments now play a far more prominent role in occupation decisions. As a result, good quality grade A buildings offering good access to transport nodes, and therefore a wider labour pool, with easy access to staff facilities are very much top of the list.
It will be interesting to see how many of the proposed new office developments will actually commence in the city centre next year, in the light of increasing construction costs, with only Muse Developments' One New Bailey in Salford and Allied London's Cotton Building in Spinningfields currently on site. Occupiers with fixed lease events will no doubt commit additional resource to due diligence to ensure that programmes and delivery can be met. I predict that one or two tenants will surprise the market with their eventual choice of premises.
2015 will bring further house price growth, however this will be tracked by some degree by construction cost inflation thereby still preventing the development of less viable schemes. Purchaser demand will continue to grow, helped by the growth in real wages for the first time in a number of years.
We will continue to hear about the emergence of the private rented sector but I think some of the fog will clear next year and the market will realise that the PRS product does indeed exhibit distinct patterns in terms of its design and location. As a result, less and less general residential schemes will be badged PRS but a small number of distinct PRS developments will still commence, funded by the institutions.
With a continuing recovery in the economy and buoyant occupancy rates in Manchester, it is likely that we will see further hotel development, particularly in the boutique sector. Given the Chancellor's recent announcement supporting the Allied London's proposed Factory arts centre, there are even more reasons to support the provision of additional rooms in the city centre.
Phil Mayall is development director for Muse Developments and English Cities Fund