It was another good year for Manchester and Salford centres in 2023, with 61 projects on site over the year, according to Deloitte’s annual Crane Survey. When it came to completions, the residential sector led the way, repeating the stand out performance delivered by the development and construction sector in 2022.
It’s been a transformative period for the regional centre. Since 2018, Manchester and Salford has witnessed 178 new projects, delivering 22,000 new homes, 3.5 million sq. ft. of new workspace, nearly 4,000 new hotel rooms, and notable growth in the higher education sector, including over 1.7 million sq. ft. of new education floorspace. The period between 2018 – 2023 will be remembered for the advent of high-rise living, alongside the delivery of all forms of supportive development.
Councillor Bev Craig, Leader of Manchester City Council said: “2023 was another stand-out year for Manchester. The evolution of Manchester’s city centre continues at pace, with new neighbourhoods emerging and progress on lots of new residential and commercial developments. A highlight of 2023 of course was the opening of Aviva Studios, which added another world-class venue to our already rich cultural offer. We have also seen continued progress on growing the city centre with new neighbourhoods, perhaps most notably at Victoria North, which will create 15,000 new homes in the largest renewal project Manchester has ever seen.
“As we look forward, a key challenge remains: to extend the undoubted success we have witnessed in the centre out into our communities beyond the city centre. To this end, we are already progressing exciting plans for district centres including Wythenshawe Civic Centre, Moston and Gorton. Guided by our recently refreshed Economic Strategy, we will continue to build on this momentum in future years, to ensure that every resident can benefit from the city’s success.”
Now in its 24th year, the Manchester Crane Survey monitors construction activity across a range of sectors including offices, residential, hotels, retail, and education, providing a barometer of developer sentiment and future supply.
Residential
Housing delivery remained strong throughout 2023, with a total of 2,402 new homes completed across 10 schemes and 11,764 units under construction. This figure is largely consistent with 2022, which saw 2,724 homes delivered. The pipeline for future delivery is also promising, with 17 new starts in 2022 and an additional seven in 2023.
The Salford Central sub-area dominated residential delivery figures, with 1,114 completions across four schemes. This follows successive years of rapid housing delivery in the sub-area, which has seen 15,996 new homes completed between 2014 and 2023. In Manchester’s Great Jackson Street area, new developments also continued at pace with the completion of 414 new homes at the Blade, and a further 441 homes due to be completed at Three60 in 2024.
Mel Wilson, Director in Real Assets Advisory, said: “Residential development has remained at the core of Manchester’s evolving skyline. For instance, it’s seen the transformation of the Great Jackson Street area from surface-level car parks to iconic high-rise residential destinations which are now a significant feature within the city centre. Emphasis has also been given to the provision of amenities and social infrastructure, such as the completion of the Crown Street Primary School in 2023.
“The consistent delivery levels over the last two years are likely reflective of a steadier trajectory of housing delivery, following a ‘boom’ period between 2019 and 2021. However, the number of units under construction in 2023 is well above the average of 6,349 units for the period since 2002.”
Commercial offices
In 2023, Manchester and Salford saw 381,000 sq. ft. of office floorspace delivered across three schemes. Although this is a reduction of 315,000 sq. ft. from 2022, construction levels are set to return over the next year. A total of 2.2 million sq. ft. of office floor space is set to be delivered by 2025, with 1.5 million sq. ft. due to be completed this year, of which 38% is already pre-let.
Of all the floorspace under construction in 2023, refurbished office space made up 53%, with a total of 1.2 million sq. ft. This is the first time that refurbishments have overtaken new construction and is a considerable increase on 2022’s figure of just 21%. Notably, listed buildings make up 31% of this refurbished stock.
Wilson added: “Although completions were somewhat slower in 2023 than the previous year, the pipeline for the next two years is incredibly strong. The large volume of refurbishments and listed buildings reflected in the figures is also testament to the value and continued strength of Manchester’s cultural heritage. This development trend can also have significant sustainability benefits, particularly in terms of reduced embodied carbon.
“We’re also seeing a continued demand for amenity-rich Grade A offices across the city. Clearly, the increase in hybrid working models following the pandemic means there is greater demand for improved office spaces and amenities. Equally, developers and landlords are facing pressure to ensure that their buildings achieve a minimum EPC rating of B by 2030, meaning refurbishment and new-build schemes alike are aiming to hit ambitious environmental goals.”
Education
In 2023, 2,153 purpose-built student accommodation (PBSA) bedspaces started construction. This is a stark contrast from 2022, which saw no new schemes, and reflects the highest quantum under construction on record. The crane survey area could also benefit in the near future from the additional 4,813 bedspaces that have planning permission, coming at a time when the national number of university applicants is expected to increase from 750,000 to 1 million by 2030.
The last year also saw continued investment in Manchester’s world-class education facilities. Manchester Metropolitan University has demonstrated its commitment to enhancing education space with the University’s new Science and Engineering Campus set to open on Cambridge Street in 2024, alongside a planning application for a new All Saints Library which were submitted in November. Phase 2 of the Manchester College Strangeways Campus also commenced construction in 2023 which, alongside residential developments, will act as a catalyst for development in the wider Strangeways area.
Jennifer Chatfield, Manager in Real Assets Advisory, said: “For the past decade, Manchester’s education facilities have moved from strength to strength, and they have become a key pillar in the city’s sustained economic growth. The sharp increase in purpose-built student accommodation schemes coming forward in 2023 will allow the city to continue accommodating its growing student population, which forms an important future talent pool for businesses.
“With the number of university applicants expected to increase significantly by 2030, there is a need for the city to continue responding to a demand for student accommodation. The continued investment in educational spaces will allow the city to remain at the forefront of innovation and educational excellence, ensuring that the city’s universities continue to attract some of the best talent from around the world.”
Leisure, tourism and hospitality
In 2023, Manchester continued to solidify its position on the world stage as a city of culture. A total of 245,653 sq. ft. new hospitality and leisure floorspace was brought to market in 2023, with DIECAST and Factory International’s Aviva Studios alone comprising 228,000 sq. ft. of delivered floorspace. The completion of Aviva Studios has provided the region with an internationally significant venue for arts, culture, and music, whilst the arrival of events such as Chanel’s Métiers d’Art fashion show in December 2023 continued to showcase the city to a global audience.
Looking ahead to 2024, with Co-op Live arena set to open, appetite for new hospitality and leisure spaces remains strong. While there were no new hotel completions in 2023, following a 2022 peak of 1,504 rooms, there are seven schemes now under construction, set to deliver 1,210 beds and expand Manchester and Salford’s five-star hotel offering.
Chatfield added: “Manchester’s thriving culture and business goes somewhat to explain the fact that hotel occupancy rates, at 68.5%, are higher than pre-pandemic levels and above London. The hotel sector is now responding to the strength of the hospitality sector, with two new schemes starting in 2023. This includes a diverse range of offerings, from five-star hotels to aparthotels and brands like W hotel entering the Manchester market.”
