Two thirds (68%) of property investment professionals believe that Manchester is the best city in the Northern Powerhouse to invest in, according to new research from national commercial property consultancy Lambert Smith Hampton (LSH).
As part of the research conducted for the company’s 2016 Northern Powerhouse Office Market Report, property developers and investors from around the UK were asked their opinions about the region. Those who identified Manchester as the best place to invest gave reasons ranging from the wide variety of businesses and large education talent pool, to its comparatively favourable transport links.
However, just over a quarter (28%) of respondents said that although the Northern Powerhouse was growing in potential they did not believe it would ever truly compete with London as a business location.
Matthew Scrimshaw, Head of the North Region at Lambert Smith Hampton, said: “For the Northern Powerhouse to thrive and succeed in the long-term, we still believe that the government’s money should be spent on Northern Powerhouse Rail (HS3). By focussing on connectivity within the region, rather than connecting northern powerhouse cities to the capital, it will prevent the most talented employees from being lost to London, while stimulating our regional economy further.”
The popularity of Manchester for investment and as a location for business was also reflected in the office accommodation take-up figures. Of the 941,000 sq ft of new office space which is expected to complete by Q3 2017, 34 per cent of it is already committed and the remaining stock is expected to be absorbed over the next 12 months, if not sooner.
As a result of the high demand for Grade A office space in Manchester, in 2017 prime headline rents in the city centre are expected to rise by six per cent to £36.00 per sq ft.
Lambert Smith Hampton’s research identified Salford as being likely to become one of, if not the biggest, coworking hubs in the Northern Powerhouse, due to the growing popularity of its Tomorrow Building and Greenhouse sites, which offer coworking facilities. The report is also predicting that prime rents in Salford will reach £25 per sq ft in 2017.
Abid Jaffry, head of northern capital markets for Lambert Smith Hampton, commented on the research results: “Since the recent referendum we have seen, rather unsurprisingly, that institutional investment has dropped off, but the baton has very much been picked up by overseas investors. They have been acquiring across the Northern Powerhouse and continue to do so.
“Overseas investment has not just been directed at the prime end of the market but at a diverse range of opportunities from asset management to defensive plays.
“Manchester remains a key driving force with the larger lot sizes but large scale buys in key cities such as Newcastle and Sheffield are becoming much more commonplace and demonstrate a broadening of appeal in the Northern Powerhouse.”
