Transforming the skyline Manchester Crane Survey 2017 Transforming the skyline | Manchester Crane Survey 2017 Contents The Report 02 Key findings 04 Manchester development snapshot 05 1. Residential 06 2. Office 10 3. Hotel, Retail and Leisure 13 4. Education, Research and Healthcare 16 5. Developments table 17 6. Contacts 24 01 Transforming the skyline | Manchester Crane Survey 2017 The Report What? A report that measures the volume of development taking place across central Manchester and its impact. Property types include: • Residential; • Office; • Leisure, retail and hotels; • Education and research facilities. Where? Central Manchester and Salford. Who? Developers building new schemes of the following size, or undertaking significant refurbishments of office buildings: • Office > 10,000 sq ft • Retail and Leisure > 10,000 sq ft • Education and research > 10,000 sq ft • Residential > 40 units • Hotel > 35 rooms When? Research for the Crane Survey was recorded between 31 January 2016 and 13 January 2017. How? Our in house Real Estate team has monitored construction and pipeline development across the city and has carried out field research. Our field research is then verified with direct industry links and in‑house intelligence. 02 Transforming the skyline | Manchester Crane Survey 2017 D T R EE E TR BL AL S A 39 D K C AY H IL K Y W C S F T VICTORIA O R TRINI M R IA 43 T I 24 S L R LE S 49 R N RD R T S T O O M 48 S I A A D T H Y A 18 T A I A 15 LD S R R O L I W L O I H H Y 36 T PO SHUDE P T R 52 IC L NI O E I V 57 60 R BL C 54 D A T C K F A ST RI ARNDALE G 51 A EL R 50 47 P S S R HA T E C A 59 33 T 62 T A PEL S CHA N C T 55 O 46 S A T S 56 S SALFORD S S 63 T 16 O 2 B T CENTRAL R E 17 IDG R S T E S C D 23 T A R 61 A G L L S O P T 4 S D AN P R SPINNINGFIELDS Y T 38 E I S E C 58 D D 9 P 19 L 22 D C 53 L R S E 45 QU IN N A I A O A D T F Y C S ST E M TL I D S R L E L S L 3 R T ITV S 7 O 21 Y TO O T P S S P GRANADA ET R 6 E E R ST T 8 A T 1 W S PICCADILLY R LIV 5 Y 11 EG 44 E O 10 EN 37 RP E T OO L X T RD L S S RO F H L FA AD O O T O IRFI OR ELD ST 12 M R N GT W D IT D BR H E 25 ID O GEW S W N A T T P N TE S A R R R I L L N D L D A CE A S 41 W D SS S R O O 42 N S 29 14 T S T 20 40 32 30 DO O WN IN 13 G S 26 X T D R F R O E 28 T R S Y E A D W H N U C C IA CUN R P H N MA D P O E 31 R P R R B L IN R T O ON 34 C 35 O ES 33 K UNIVERSITY OF S S S T T MANCHESTER RO A 27 D 03 Transforming the skyline | Manchester Crane Survey 2017 Key findings Manchester Crane Survey results Outlook 6,963 residential units currently Strong base for residential development to under construction exceeds 2007 levels meet targets, with a construction and by 2,994 units. planning pipeline extending to 2020. Four new residential starts exceed 25 storeys, The rental market will continue to dominate with an average height of 17 storeys across all the residential sector moving forward, residential schemes. predominantly through delivery of PRS schemes in 2017. 39 new schemes started construction in 2016, Political and economic uncertainty has led by the residential market. brought the stability of the currency under scrutiny and could dampen investment. Refurbishment projects fuel new office Weakened Sterling could boost tourism and pipeline, totalling 60% of all new space make it cheaper to invest, while international in construction. connectivity via Manchester Airport increases. 12% of office floorspace under construction Strong occupier demand for office space in is pre‑let. Q4 2016 will continue throughout 2017. Manchester office market headline rents at Universities are likely to continue delivering £35 per square foot for prime space. further schemes in 2017 as part of strategic repositioning and expansion. Approximately 199,000 sq ft of new Residential schemes will continue the trend additional education or research of delivering at height and scale – given limited floorspace currently under construction. land supply in prime locations. 04 Transforming the skyline | Manchester Crane Survey 2017 Manchester development snapshot Which sectors are the most active? (Number of schemes under construction) 12 Office 5 Hotels Completions 3 Education and Research 2017 survey 1Student Residential 28 Residential period 0 Retail and Leisure 17 umber of new constructon starts Office new build vs Refurbishment Floorspace under construction Office space 0 under construction 39 2017 Survey 40 1,420,283 sq.ft 21 2016 Survey 28 2007 Survey Hotel beds under 1.7 Survey verage New build Refurbishment construction Residential Anticipated Average Residential units under construction completions residential 2002‑2016 2017 Survey 1,040 2016 completions 6,963 2017 Residential units under construction Increase in 2007 Survey beds under 3,965 construction 1,113 2,658 1,207 Average under construction 2007-2017 from 2016 2,273 63.27% 05 Transforming the skyline | Manchester Crane Survey 2017 1. Residential Last year we reported significant growth in the The strength of the residential market demand is residential sector during 2015, with 2,982 units underpinned by the city’s resilient economic growth, under construction. Levels exceeded the 2002‑2016 investment in infrastructure and employment construction average of 2,273 units for the first time sector diversification. Retail, leisure and world class since 2009 and the city began to see the construction cultural institutions based in the city centre have also of a first wave of PRS schemes. supported lifestyle aspirations and focused growth on city centre living, pursued through long‑term strategic In 2016, the growth trend continued. This year’s ambition. survey breaks Crane Survey records with 6,963 units under construction, 2,578 more than recorded in Lifestyle and culture, clarity on investment 2008. 22 new residential schemes started on site this opportunities and a supportive strategic planning year, 8 more than recorded in 2008, bringing the total regime has made Manchester an attractive place number of residential schemes under construction for residential investment. A three year backlog of to 28. unimplemented residential planning permissions, secured as the market recovered, has been coupled 1,113 units were delivered during 2016, meaning with a raft of funding agreements for PRS schemes this is the seventh year of under delivery against from investors including Apache, Patrizia, Ares and the 2002‑2008 average of 1,777 units per annum, Moorfield and loans from the Greater Manchester exacerbating undersupply against strategic targets. Housing Fund. Notable schemes over 150 units that However, the factors underpinning the continued have started in 2016 include: growth in the residential sector are more than just lack of supply. • 1 Owen Street (1,494 units) • Angel Gardens (466 units) Residential Delivery 2002‑2017 • Exchange Court (350 units) • Middlewood Locks Phase 1 (571 units) • Sawmill Court and Smith’s Yard, Ancoats (358 units) Highest elivery • Axis (172 units) 200 4,196 • Castlefield House (232 units) Anticpated elivery calendar year 2017 • X1: The Plaza (194 units) 2,658 • Bridgewater Point and Bridgewater Gate (273 units) Pre-recession (02-07) • HoUSe – Irwell Riverside (171 units) average 1,777 • The Sky Gardens (166 units) owest level of • Manchester Waters (164 units) delivery – 0 (2013) 06 Transforming the skyline | Manchester Crane Survey 2017 The skyline will be transformed as a result of the scale Manchester: Residential development pipeline of residential development, with 4 new starts for No. of units schemes exceeding 25 storeys, including Axis 4,500 (28 Storeys), Owen Street (64 – the UK’s tallest 4,000 residential tower), Angel Gardens (34) and Exchange 3,500 Court (44 – due to be Salford’s tallest building). 3,000 2,500 The trend for high rise PRS development is expected 2,000 to continue into 2017 with Planning Permission in 1,500 place and site preparations underway for further 1,000 developments at Oxygen (34), Whitworth Street West 500 (35), First Street (26), St Johns’ Place (52), Circle Square 0 (37), Embankment West (32) and Affinity Riverside and 2011 2012 2013 2017 2015 2019 2014 2016 2018 2010 2020 2002 2007 2003 2005 2009 2008 2006 Riverview (34). 2004 Completed U/C 2002-2015 Geographically, the 2016 Survey showed a clear focus of residential delivery in key growth areas north of the inner ring road and the distribution of residential new The large scale PRS developments and tall buildings starts in the 2017 Survey, in particular tall buildings, under construction demonstrate a need to intensify corresponds with the route of the inner ring road and land use and density on finite land resources and transport interchanges.