The UK’s city centres away from London continue to thrive, and the latest Deloitte Crane Survey hones in on why Manchester remains one of the top cities for investment.
Confidence in the UK’s regional city centres is high, and this can be demonstrated by analysing the construction activity taking place there. Fundamentally, the more cranes you can see across a city’s skyline, the more investment and redevelopment is taking place there, which brings with it a whole range of tangible benefits.
One city in the UK in particular that continue to make headlines for its growth and resilience is Manchester. Being recognised for accolades such as the best place to invest in property, top area for capital appreciation and the strongest new-build market, these cities are hotspots for property investment.
In Deloitte’s latest Crane Survey, both of these cities have shown either sustained or increased development activity across sectors including offices, residential, hotels, retail, education and student housing.
As John Cooper, partner in real assets advisory at Deloitte, points out: “Developer confidence is a key indicator for economic health and, despite many market uncertainties over the last few years, construction in our surveyed UK regional cities remained remarkably resilient.
“Over 6,500 new homes were delivered to market in 2022, while more than 21,500 homes remain under construction – reinforcing more sustainable patterns of urban development and creating great places to live and work.”
Honing in on Manchester
Manchester’s residential market in particular has gone from strength to strength, according to Deloitte, with 25 new projects going under construction in both Manchester and Salford city centre during 2022. There were also 2,734 new homes delivered last year.
The momentum in this area looks set to continue, too, with 17 new residential developments under construction in Manchester – the highest level seen since 2018. An estimated 11,759 new homes are currently in the pipeline, which the report notes will create a “steady supply” for the next three years.
As Deloitte points out, Manchester was one of the first regional cities to recover, in terms of construction activity, in the wake of the 2008 economic downturn, and it has led the way since then. From a property investment perspective, this level of resilience is a welcome sign of a city that can withstand turbulence.
Since 2011, the population in Manchester city centre has grown by 9.7%, from 503,100 to 552,000 in 2021. In Salford, this increase was even higher at 15.4%, and it is greater than the proportional average across England of 6.6%.
Deloitte’s report points out that, based on the current level of construction and development in Manchester, the city could see a further 20,000 people relocating there over the next three years.
The office space, tourism and hospitality have all made great leaps in recent years, too. Manchester saw a record increase in the number of hotel rooms, with more than 1,500 delivered in 2022. Meanwhile, a huge six acres of green space – Mayfields near Piccadilly train station – is another notable and positive addition to the city centre.
Other top UK cities
Deloitte’s Crane Survey highlights “the link between development and prosperity”, and the other cities that are put under the spotlight as top performers are Birmingham, Leeds and Belfast in Northern Ireland.
Belfast stood out in 2022 due to its significant growth in construction in the education space. The city saw almost one million square feet of new space opening up at the city’s two universities, with 1,850 new student beds also being under construction.
A further 23 major new schemes were also completed or under construction in 2022 across all sectors, which is a level sustained since 2021.
Birmingham, which has seen some tremendous growth and regeneration in recent years, had a stellar year in terms of residential construction. Like Manchester, its population is on the rise as a contender city for London, particularly as more big businesses continue to open offices there.
In numbers, Birmingham had 43 new schemes underway last year, 13 of which were residential – equating to 6,487 new residential units in the pipeline – up by 37% since 2021. A “record-breaking” 2,398 new homes were delivered last year, showing the true scope of growth in the city.
Finally, Leeds enjoyed its second highest level of new construction starts since 2006 last year with 22 in total. Its education sector is also hugely important to the city, and there are now 11 schemes under construction there for student accommodation.
