Emerging Trends in Real Estate® Europe, a trends and forecast publication now in its 17th edition, is a highly regarded and widely read report in the real estate industry. Undertaken jointly by PwC and Urban Land Institute, the report provides an outlook on real estate investment and development trends, real estate finance and capital markets, cities, property sectors and other real estate issues throughout Europe. See what the report says about Manchester:
“I can’t see anything other than Brexit that would put people off the UK regional markets. Economically there isn’t much difference between UK and European GDP. It is the political uncertainty that investors can’t ignore.”
Without that hindrance to cast a shadow over Manchester’s prospects, they might be seen in a much more favourable light because the city’s now well-entrenched reputation as the UK’s up-and-coming conurbation still endears it to some investors. “It is a thriving city in many ways and benefits from having a large airport with two runways. It has a pretty progressive council and now has a metropolitan mayor, and there has been a strong vision around town
planning. We would be happy to invest there,” says a panEuropean manager.
Interviewees identify the office market as particularly fertile ground for investment. Vacancy is low, and rents show potential to grow beyond their mid-2019 headline level of £393 per square metre per annum in 2020 thanks to continued demand from a solid tenant base. “In Manchester you have local law firms and other mid-sized companies, but also bigger businesses which serve the local market, which is what we like to see. We still do a lot of offices in Manchester, but we wouldn’t do retail there,” says another European investor.
In some circumstances, market dynamics in the sector are healthy enough to overcome concerns about the wider political climate, says an overseas investor. “We’ve done a lot less over the last two or three years in the UK as a consequence of Brexit. And what we’ve done has been done very, very carefully and well supported by some really, really strong fundamentals, and the regional office market has those.”
So far, Manchester’s residential market has been spared the price falls and stasis seen in London; JLL identifies the city’s centre as the most attractive UK residential market with a 4.5 percent average price growth forecast over the next five years. With four universities in Greater Manchester, the city has one of Europe’s largest student populations. Purpose-built rental blocks to accommodate the booming number of students and young professionals now account for a significant proportion of the city centre’s development pipeline.
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