Recent years have seen Manchester soaring in economic, population, job and industrial growth, making it a prime target for global and local real estate investors.
By placemaking for the future, Manchester seeks to maintain these levels of growth, and the property sector must rise to the challenge of creating an enviable environment in which communities can thrive.
A key part of its evolution is (and will continue to be) real estate investment. Here are the key contributors making Manchester a smart investment choice.
Manchester’s infrastructure and investment sector is booming, the city second to London in terms of Foreign Direct Investments in 2017 with 47 new projects.
Arguably the most significant project is the expansion of Manchester airport, which has already opened new direct routes to the far east including to Beijing, Hong Kong, and a handful of Middle Eastern hubs this year.
Speaking at the opening of the UK Northern Powerhouse Conference at Manchester Central, Manchester Airports Managing Director Ken O’Toole said:
When we reach our goal of being a 45 million passenger a year airport, the economic benefit we will bring to the UK will be nearly £1bn greater than today and we will support 20,000 more jobs.
All in, the combined infrastructure growth around the city creates the perfect investment opportunity outside of London, with strong yields and capital growth returns expected.
Recent research such as The GCC Investor Report 2018 and has revealed that high net worth individuals from the Middle East have set firm sights on Manchester as a property investment target.
Meanwhile, Hurun’s Immigration and the Chinese HNWIs 2018 report estimates that the wealthiest individuals in China will increase investment in overseas real estate by a momentous 50% over the next three years, with a large portion destined for the British property market.
The Hallmark, Manchester CGI
Buyers are recognising the capital growth potential in Manchester, with anticipated yields of 6% at developments such as The Hallmark. Apartment prices in Manchester increased 52% in the six years between November 2011 and 2017, and show no sign of slowing, making residential investment an appealing prospect for both local and global investors.
Economy and jobs growth
The high demand for city-centre residential property can also be attributed to the boom of Manchester’s commercial sector, signposting a strong employment market which draws in job seekers. Valued at £59.6 billion, Manchester’s economy is the largest in the UK outside of London and continues to expand rapidly as more and more companies are northshoring – that is, cutting the cost of offices and labour by moving outside of London.
Source: Select Property
The tech and media sectors have particularly taken off in Manchester, creating a network of highly qualified talent in the 18 to 35-year-old demographic. Dynamic young professionals such as these are attracted to the flexibility and affordability of renting, resulting in a significant demand for suitable, quality housing in the city.
The influx of people moving to Manchester is visible in recent statistics. The city has seen the fastest city centre population growth rate in the UK between 2002 and 2015 with an increase of 149%. Its population is soaring almost 15 times the rate new homes in the city are currently being built at.
Last year, net migration to the North West was reported positive for the first time in a decade as more professionals flocked to the region. Manchester is second only to London in terms of student retention at 51.5%, and draws in the second-highest number of graduates (3.8%) moving from their university towns after graduation, rather than the usual migratory path to London.
Source: Cushman & Wakefield, ONS
Manchester City Council has become a prime example of how, through nurturing innovation and a commitment to placemaking, it is possible to attract investment and regenerate older sites. Real estate financiers are already reaping the rewards of Manchester’s property market, realising the benefits of early investment.
If you’re interested in finding out more about property investment, whether as a buy-to-let landlord or an owner occupier looking to tap into Manchester’s growth, we’d be happy to discuss potential projects and opportunities with you. Get in touch to arrange a meeting with us.
Interested in Manchester?
Read our white paper – A Tale of Three Cities
Read our recent blog – Manchester spotlight: capital of the Northern Powerhouse