Seen by many as the capital of the Northern Powerhouse, Manchester continues to lead the North West in terms of its contribution to the UK economy. According to EY’s latest ‘UK Attractiveness Survey’, Manchester attracted the most foreign direct investment projects outside of London. Earlier in the year, Colliers ranked Manchester third in Europe behind London and Paris in its ‘Cities of Influence’ report. This strong performance appears to be having a positive impact on property investment in Manchester, with the city’s buy to let market making the top 10 in a June survey by specialist mortgage lender LendInvest.
The city’s ambitious urban regeneration is one of the key factors behind the strength of its rental market. The availability of high quality, centrally located property, is attracting a new generation of professionals who might otherwise have their sights set on London. Indeed, attracting and retaining talent is one of the main challenges facing UK cities, and it’s a battle that the city appears to be winning. Investment in Manchester’s facilities and transport network appears to paying dividends, creating a fertile environment for new businesses to thrive.
Other leading industry voices have highlighted the city’s potential in recent months. The CBRE ranked Manchester first in its ‘Creative Regions’ survey, citing, “the largest number of creative industries businesses, the largest millennial population, a deep talent pool of creative professionals with a highly skilled graduate workforce and access to universities with strong research and computer science rankings,” among its many positive attributes.
The city’s creative workforce is fueled by a growing millennial population, which is creating a high rental demand. Manchester’s prime property investment hot-spots are those close to the city centre, including Claremont, Salford and Trafford.
With rental yields approaching 9%, Salford is one of the areas attracting the most interest from property investors. The town is grabbing the headlines as a magnet for tech innovators, with new businesses arriving at a faster rate than anywhere else in the UK. And as home to MediaCityUK, where the BBC employs some 2,700 staff, Salford can boast a creative media network to rival anything in London.
According to a study by business information provider DueDil, Salford outranked London as the UK’s leading hub for startup growth. The area is fast becoming the centre of the nation’s digital economy. Gaming companies, augmented reality innovators, and the new breed of the tech scene are choosing Salford as their base. A thriving startup scene stimulates property investment, as speculators regard new-build apartments for young professionals as a good bet.
At RW Invest we specialise in connecting investors with the best value in the Manchester buy to let market. One property generating significant interest at the moment is Caxton Hall in Salford. In perfect proximity to Manchester city centre and with excellent access to the area’s business network, Caxton Hall is tailor-made to meet current demand.
As Greater Manchester continues to attract business and property investment, so work towards achieving a fully integrated transport network must keep pace. The completion of the Metrolink Second City Crossing earlier in 2017 is evidence that Transport for Greater Manchester (TfGM) is equal to the challenge. The expansion trebled the size of Greater Manchester’s light rail network, which is now the largest light rail network in the UK. In 2016, a record-breaking 37 million journeys were made using the network, which illustrates how TfGM must stay one step ahead of demand.
Construction is also underway on the Trafford Park line, featuring six new tram stops which will connect Pomona with the Trafford Centre. The line is part of an ongoing drive to ensure new businesses join the likes of Adidas, L’Oreal and Kelloggs in Trafford. With multinationals lining up alongside startups and entrepreneurs, it’s one of the most competitive economic areas in the North West. Trafford’s property investment market offers a secure, long-term opportunity for property investors weighing up their options in the city.
Trafford is very much part of our plans at RW Invest, and West Point is one of our most exciting developments. Comprising 346 stylish units, complete with stunning communal facilities, West Point reflects the economic ambition sweeping through the area.
The Trafford Park line will also play an essential part to the east of the city, as the regeneration of the former docks continues to take shape. Pomona Island is the site of a 216-apartment development providing a new destination for business, retail and leisure. The mixed-use scheme by Falconer Chester Hall is yet another exciting proposition for residential and commercial property investors.
TfGM recently launched its Transport Strategy for 2040, which set out a blueprint for mobility in a modern and fast-growing city-region. With the Northern Powerhouse project gathering momentum, Manchester’s goal to become a world-class centre for innovation is coming to fruition. Property investors take note.
Manchester City Centre Office Space: Rental Analysis
According to the CBRE’s H1 report, take-up for Manchester city centre office space in the first half of 2017 stood at 480,000 sq ft, up 15% on the corresponding period for 2016. The strongest sectors for take-up were business services, consumer services and leisure, and banking and finance.
The report showed that forecasts for H2 were positive due to a strong pipeline of enquiries and several London-based occupiers looking to set up offices in Manchester to cut costs.
Neil Mart, Director CBRE Manchester said in his analysis: “Larger occupiers are realising that good quality stock is dwindling, with many now making moves to secure the best space before others do, with limited Grade A stock available in 2017 and no new build completions due in 2018, headline rents are expected to rise.”
Investment volumes held up in 2017, despite uncertainty surrounding Brexit. Although a period of nervousness followed the EU referendum result, normal business soon resumed and the CBRE now reports greater demand from both UK and overseas investors than during H1 2016.
Challenging economic conditions will persist as the Brexit negotiations rumble on. All indications are, however, that Manchester has the infrastructure and business network to continue to attract property investment.