Over the course of 2014, we’ve seen the property markets of the UK regional cities bounce back to something like a healthy state – you’ll probably have noticed the increase in tower cranes around the place.
Where’s all this activity coming from, i.e. what are those buildings going to be? To a large extent, student accommodation remains one of the busiest parts of the market, with blocks of purpose-built studio apartments continuing to find favour with an increasingly international student market.
But residential property in a wider sense is coming back strongly as well – the private rented sector (PRS) in particular has been a solid performer, while there’s been some success for government policies such as ‘Build to Rent’ which in November saw its first scheme in the North opened.
In the commercial market, Manchester – in particular – has had an outstanding 2014 with over 1 million sq ft of office deals in the city centre set to be completed before year end. Encouragingly, there’s a really good mix of companies committing to space; from Ford Credit and Trader Media to law firms like Slater & Gordon. Just as valuable as newcomers to the city are the companies which are reaffirming their ties, such as Ticketmaster did last month after moving from Griffin House to Sevendale House in the Northern Quarter.
So, where might 2015 take us? Expect to see, in certain locations, speculative development. With the supply of good office space having been taken up over a few years of low building activity, landlords who have the funding in place can steal a march on the competition by bringing their buildings to the market. This is true in offices, but probably more pressing in industrial property, where the North West has few large buildings to accommodate the needs of major occupiers.
Expect also universities and science-related projects to be prominent. The Oxford Road corridor in Manchester and the areas heading uphill from Liverpool Lime Street are key to each city’s “knowledge economies,” while Bruntwood and Manchester Science Parks will be looking to take forward their plans at the old AstraZeneca Alderley Park site. Daresbury’s SciTech Enterprise Zone is also strategically important for the region.
Sites where activity had stalled due to recession or other reasons are also creeping back into contention, and it’s important for cities to move things forward – reputations for things getting bogged down are hard to shake off. In Manchester, the London Road Fire Station and the Labour Exchange on Aytoun Street; in Leeds the former Lumiere site – every city has them.
Activity has to happen while things are moving in the right direction – with city leaders pushing for devolution as the General Election nears, the will is certainly there to make the regional cities stronger.