Manchester Economy and Employment Space Study Manchester City Council
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Manchester Economy and Employment Space Study Manchester City Council May 2010 Manchester City Council MANCHESTER ECONOMY AND EMPLOYMENT SPACE STUDY FINAL REPORT May 2010 1 Nathaniel Lichfield & Partners Ltd 3rd Floor One St James's Square Manchester M2 6DN T 0161 837 6130 F 0161 833 3741 Offices also in Cardiff [email protected] London www.nlpplanning.com Newcastle upon Tyne Manchester Economy and Employment Space Study - Final Report Contents3 Executive Summary 1 Introduction 1 Core Outputs 2 Conclusions 7 1.0 Introduction 10 2.0 Economic Context 13 The City 13 Economic Activity 14 Manchester as a Leading City 15 Economic Trends 17 Inward Investment 23 Knowledge-based Industries 24 Commuting 25 Public Transport Context 27 Conclusions 28 3.0 The Current Stock of Employment Space 30 Main Employment Areas 30 Stock of Employment Floorspace 31 Emerging Supply of Employment Space 33 Property Availability/Vacancy Levels 34 Development Rates 36 Losses of Employment Space 37 Age of Premises 37 Available Employment Land 38 Employment Space in Adjoining Areas 38 Conclusions 43 4.0 The Manchester Commercial Property Market 44 Overview 44 Office Supply/Demand 44 Industrial Supply/Demand 49 Rental Levels 49 Inward Investment 51 Needs of Local Businesses 53 Potential Future Growth 54 Conclusions 54 5.0 Review of Current Employment Sites and Allocations 56 Approach to Assessment 56 1051351v2 Manchester Economy and Employment Space Study - Final Report Overview of Sites 58 Overview of each Manchester Sub-Area 67 Conclusions 70 6.0 Economic Potential and Growth Sectors 77 Representation of Key Sectors 77 Sectors with Growth Potential 80 Strategic Site Requirements 86 Conclusions 88 7.0 The City Centre and Landless Growth 89 Introduction 89 The Economic Role of the Regional Centre 89 Prospects for Future Growth 91 Landless Growth 91 Increasing Density of Development 92 Office Developments 97 The Potential for Landless Growth 102 Conclusions 113 8.0 Future Employment Space Requirements 114 Factors affecting Future Employment Space Needs 114 Growth Scenarios 116 Planning Requirement for Employment Land 121 Reality Check 130 Conclusions 131 9.0 The Demand / Supply Balance 133 Quantitative Balance 133 Qualitative Factors and the Locational Distribution of Employment Space 135 Balancing Supply and Demand 137 Types of Space Required 148 Release of Employment Land 149 Conclusions 150 10.0 Supporting Economic Growth 152 Introduction 152 Renewal/Intensification of Existing Sites 152 Potential New Sites 153 Site Deliverability 159 Summary 160 11.0 Conclusions 162 Contextual Summary 162 Supply vs. Demand 163 1051351v2final report 050510.doc Manchester Economy and Employment Space Study - Final Report Supporting Economic Growth 167 1051351v2final report 050510.doc Manchester Economy and Employment Space Study - Final Report Figures3 Fig 1 Summary of Demand/Supply Balance, by Sub-Area 8 Fig 2: Methodology 11 Fig 3: City Regional Context of Manchester 13 Fig 4 Employment Structure of Leading UK Cities 16 Fig 5 Economic Analysis of Leading UK Cities 17 Fig 6 Principal Sectors of Employment Source: Annual Business Inquiry 1998-2007 / NLP analysis 19 Fig 7 Distribution of Banking, Finance and Insurance Jobs 20 Fig 8 Claimant Unemployment Rate 1998-2008 21 Fig 9 Occupational Breakdown of Labour Force 22 Fig 10 Deprivation by Super Output Area 23 Fig 11 Knowledge-Based Businesses as a % of Stock 25 Fig 12 Travel to Work Data 26 Fig 13 Number of Employment Premises, 2007 31 Fig 14 Number of Employment Premises, 2007 32 Fig 15 Stock of Employment Floorspace per 1,000 population 32 Fig 16 Employment Space by Type 33 Fig 17 Change in Employment Floorspace, 2000-2007 34 Fig 18 Vacancy Rates of Commercial Property 35 Fig 19 Gross Completions (by use) 36 Fig 20 Gross and Net Completions 37 Fig 21 Manchester Office Availability by Submarket, 2006-2008 46 Fig 22 Manchester Office Availability by Type and Submarket, 2008 47 Fig 23 Manchester Office Supply, 2004-2010 48 Fig 24 Prime Office Rents for Selected Centres, 2009 50 Fig 25 Industrial Rents for Selected Centres, 2009 51 Fig 26 Inward Investment Enquiries by Sector (Greater Manchester) 52 Fig 27 Inward Investment Enquiries by Premises Size Band (Greater Manchester) 53 Fig 28 Assessed Site Quality – Existing and Committed Sites 60 Fig 29 Comparison of Existing and Committed Assessed Quality 61 Fig 30 Existing Sites Assessed: Quality 62 Fig 31 Size of Existing Sites 63 Fig 32 Committed Sites - Assessed Quality 65 Fig 33 Size of Committed Sites 66 Fig 34 Location Quotient by Sector (Manchester), 2007 78 Fig 35 Location Quotient by Sector (Manchester), 2007 79 1051351v2 Manchester Economy and Employment Space Study - Final Report Fig 36 The Regional Centre 89 Fig 37 Manchester City Centre: Key Quarters 90 Fig 38 High Rise Development 94 Fig 39 Employment Densities in UK Core Cities' CBDs 96 Fig 40 Landless Growth (sqm floorspace) 99 Fig 41 Manufacturing Job Growth (Source VoA / NLP Analysis 102 Fig 42 14 Key Quadrants within the Regional Centre 103 Fig 43 Projected Employment Change for Manchester to 2027 117 Fig 44 Forecast Net Employment Change over Time for Manchester 118 Fig 45 Projected Employment Change to 2027 (by Use Class) 120 Fig 46 Net Employment Land Econometric Projections to 2027 (by Use Class) 125 Fig 47 Gross Employment Land Econometric Projections to 2027 (by Use Class), including 20% Flexibility Factor 126 Fig 48 Take up rates (ha) within Manchester City Projected forward 2008-2027 128 Fig 49 Quality of Available Potential Sites 154 Fig 50 Top Performing Sites 155 Fig 51 Summary of Demand/Supply Balance, by Sub-Area 165 Tables Table 1 Economic growth potential of different industrial sectors with respect to Manchester 4 Table 2 Forecast Requirement with Landless Growth Assumed 6 Table 3 Summary of Supply and Demand for Employment Land in Manchester 8 Table 4 Summary of Key Trends up to the Recession 18 Table 5 Knowledge-Based Businesses as a % of Stock 24 Table 6 Commercial Property Vacancy Rates, 2004/05 35 Table 7 Employment Land Lost to Other Uses, 2004/05 - 2007/08 37 Table 8 Age of Premises in Manchester 38 Table 9 Summary of Total Forward Supply of Committed Employment Sites in GM 39 Table 10 Industrial Rents by Type of Space/Location 51 Table 11 Transport Assessment Criteria 57 Table 12 Assessed Site Quality – Existing and Committed Sites 59 Table 13 Existing Sites Assessed: Quality 62 Table 14 Committed Sites - Assessed Quality 64 Table 15 Available Committed Sites 76 Table 16 Economic growth potential of different industrial sectors with respect to Manchester 86 Table 17 Employment Densities (by Location) 96 1051351v2final report 050510.doc Manchester Economy and Employment Space Study - Final Report Table 18 Employment Densities over Time 101 Table 19 Analysis of Capacity to Accommodate Landless Growth 112 Table 20 Projected Employment Growth to 2027 (by Use Class) 121 Table 21 Econometric Modelling Projections to 2027 (by Use Class) 124 Table 22 Take Up Rate Need Projections to 2027 (by Use Class) 127 Table 23 Forecast Requirement with Landless Growth Assumed 130 Table 24 Employment Land Projections against Supply – 2008-2027 134 Table 25 Completed Employment Space by Area 1996/1997 to 2008/09 (ha) 136 Table 26 Distribution of Committed Employment Land in Manchester as of April 2009 (ha) 137 Table 27 Comparison of Supply and Demand for Employment Land in Manchester 138 Table 28 Summary of Supply and Demand for Employment Land in Manchester 151 Table 29 Quality of Available Potential Sites 154 Table 30 Forecast Gross Requirement with Landless Growth Assumed 164 Table 31 Anticipated Pathfinder Outputs 181 Appendices Appendix 1 Organisations Interviewed 169 Appendix 2 Review of Policy and Regeneration 170 Appendix 3 Key Data 182 Appendix 4 Transport Policy 189 Appendix 5 Site Plans 190 Appendix 6 Site Assessment Sheets 191 Appendix 7 Transport Site Appraisal 192 Appendix 8 Review of Sites by Area 193 1051351v2final report 050510.doc Manchester Economy and Employment Space Study - Final Report Executive Summary Introduction Nathaniel Lichfield and Partners was appointed by Manchester City Council in October 2008 to undertake an Economy and Employment Space Study (EESS). This will inform the City’s Local Development Framework (LDF) Core Strategy and the provision of land for employment uses. The study reviewed the City’s current employment land supply and identified the appropriate type, quantity and location of employment land capable of accommodating the economic growth trajectories, underpinned by sub regional demand and forecasting work. The study was prepared during 2008/9. The principal outputs required from the study, as outlined in the Project Brief, were to undertake a fitness for purpose review of the existing portfolio of sites; to quantify the demand for floorspace and the amount of employment land required across the main business sectors during the plan period; to identify any resultant gaps in the current provision and the scope for allocating new sites; and to assess the scope for high-density employment development within the City Centre. To achieve these objectives, NLP undertook the following tasks: An review and analysis of current economic conditions and recent trends in the City that may affect the need for employment space; A quantitative assessment of the current stock of employment space in the City, including levels and types of provision and recent changes in supply as well as major developments and employment land supply in nearby areas; A review of