Property sector is hotting up
26th February, 2015
As the countdown continues to the Greater Manchester Fastest 50 Awards 2015, Andrew Dunn, Property Partner at award sponsor and organiser Ward Hadaway, discusses the state of the region's property sector.
Development is back, and investments continue to grow. Across the region within the property sector, development is again very visible, and it sits alongside an improving investment market.
Andrew Dunn
Property activity is consistent with the region’s focused strategies in areas such as Infrastructure, Science, Hotels & Leisure, Digital and Manufacturing which are attracting strong local and foreign investment.
Whereas a few years ago during the height of the recession, building sites were few and far between, and we saw cranes disappear from the skyline, these days it is difficult to travel any distance around the region without seeing cranes in operation and builders hard at work.
It is very positive that development is happening within various property uses, and is not limited to just one.
Development is the thin end of a property asset’s life cycle, and the activity bodes very well for the next five years as it feeds all related property activity and will keep busy developers, investors, landlords, occupiers, lenders, construction teams and associated professionals.
Take the office sector. Last year saw office investment hit a record high in Manchester with some figures showing £992m being ploughed into the sector, more than double the £413m invested in 2013 while across the North West as a whole, investment was up 166% to £1.3bn.
Whilst a lot of these deals comprised completed developments being bought and sold, the steep rise in the value invested indicates a strong and growing demand for space, something which has not gone unnoticed in the office development world as witnessed by the likes of the forthcoming 11-storey No 2 St Peter’s Square development.
The region is key to the current Northern Powerhouse movement, which is seeing property and infrastructure move even higher up the agenda.
It is true to say the region is at the centre of road, rail and air travel hubs, making it an even more attractive proposition for businesses in the fast-growing logistics sector.
Last week saw planning permission secured for a new 130,000 sq ft logistics facility at the £800m Airport City project near Manchester Airport whilst further afield the giant Omega Warrington industrial park is attracting major global players in the sector as well as big names in manufacturing. The pace of development may pick up even quicker with the arrival of the HS2 high speed rail link to London.
At Ward Hadaway, we are seeing a continuation in the significantly increased levels of activity in the residential development sector, and lenders are showing good appetite to support much-needed housing.
Residential developments of all kinds are now taking shape at locations across the region, from smaller scale neighbourhood housing schemes to large estates of new homes.
And if you are looking for a symbol of how optimism is returning to the residential sector, the fact that proposals for four 23-storey luxury apartment towers to create 1,000 homes next to the Lowry Hotel recently secured planning permission is quite a potent one.
As regards the hotel sector, helped by international recommendations from the likes of the New York Times, Manchester is becoming something of a boom town for hotels. Over the next year, developments delivering more than 800 rooms will open across the city, attracted by some of the best room occupancy rates in the country despite the Manchester city region already having more than 130 hotels currently.
The retail industry continues to power ahead, from large scale showpiece developments in conjunction with the region’s local authorities to a raft of smaller schemes.
Favourable planning conditions have seen a real increase in activity in the convenience store sector as supermarket groups expand their presence in what is a fast-growing section of the grocery market via a mixture of conversions of existing units and new-builds.
We can see that our region’s lenders are working very hard to make these schemes and transactions achievable.
Many of the above examples also form part of mixed use development projects, adding to the complexity of implementation but boosting the real benefits to be felt by the region’s communities and businesses.
Whilst the uncertainty of the past few years has not been forgotten in the property industry, there is a return of cautious optimism and the promise of exciting times to come.
Ward Hadaway is delighted to continue to play an important part in the laying of the region’s necessary foundations for a sustainable future in the sector.
* Find out more about the Fastest 50.
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