INVESTING INTELLIGENTLY TOWARDS 2019/2020
CSIPROP INVESTMENT GUIDE
MANCHESTER
Manchester Growth in the UK’s most liveable city has been rapid. In the last 10 years alone, Manchester charted an impressive 50% growth, thanks to huge investments that have gone into the city as part of the British government’s Northern Powerhouse push. Jobs and population are on the rise, driving demand for housing and, consequently, causing prices to skyrocket. Manchester is a city to watch as all indicators point to it becoming the shining beacon of Northern England.
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Manchester Key Economic Indicators UK
4.2%
Population ONS & Nomis
2,768,800
Unemployment Rate ONS & Nomis
3.3% Average House Price Growth Hometrack
4.5% 6.6%
Manchester is a remarkable city. From a humble manorial township, Manchester exploded into the limelight during the Industrial Revolution to become the world’s first industrialised city. It is currently the fastest-growing city and one of the most interconnected regions in the UK — with the completion of the HS2, travel time between Manchester and London will be reduced from 2 hours to just over an hour. Today, Manchester is among the world’s top 10 cities for foreign direct investment and one of Europe’s most dynamic and exciting places in which to live and work. It is regarded as the UK’s second city and one of Europe’s largest and most important tech hubs with an economic output (GVA) of £16.1bn of the 6 UK cities within the Northern Powerhouse. Ernst & Young predicts an
Manchester
Research Report: Manchester
66m
Greater Manchester
London
annual GVA increase of 2.4% by 2020, while JLL forecasts an expansion of an average of 2.7% p.a. between now and 2022.
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Manchester Leads in GVA growth by 2020 2014-17 % GVA Growth (CAGR)
5
2017-20
4 3 2 1
Dundee
Aberdeen
Glasgow
Edinburgh
Perth
Inverness
Stirling
East Anglia
Cardiff
Cambridge
Exeter
Cornwall
Bristol
London
South Coast
Thames Valley
Southampton
Luton
Reading
Milton Keynes
Oxford
Portsmouth
Manchester
Birmingham
Sheffield
Liverpool
Hull
Leeds
Newcastle
Teeside
-1
Sunderland
Research Report: Manchester
0
Manchester has consistently shown some of the highest GVA growth rates among the UK cities. Between now and 2020, EY predicts that Manchester will see an annual GVA increase of 2.4% while JLL forecasts a GVA growth of 2.7% p.a. by 2022. Source: EY UK Regional Economic Forecast, 2017/18
High Graduate Retention Typically, the rate of graduate retention varies hugely from region to region in the UK. Data shows that in the academic year ending as recent as 2015-16 , the Northwest and London have come up tops with a retention rate of 66%. The retention rate of postgraduate leavers is higher in the Northwest (66%) than in London (65%).
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Graduate retention rate in the Northwest is led by Manchester, which is home to 4 leading universities, contributing to a student population of approximately 100,000. About 51% of Manchester’s graduates choose to remain in the city for work — second only to London in the UK. With such an active student market, city living has gained strong momentum in Manchester.
UK Cities Graduate Retention Rates, 2013/14 - 2014/15 London Manchester Belfast Birmingham Glasgow Aberdeen Edinburgh Middlesbrough
Swansea Bradford Liverpool Sheffield Bristol Stoke 0
20
40
60
Retention rate (%)
80
Research Report: Manchester
Newcastle
According to the most recent data by Centre for Cities (released Jan 2017), Manchester boasts an impressive graduate retention rate, second only to London Source: Centre for Cities.
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Vibrant Talent Pool
Research Report: Manchester
Manchester has earned a reputation as the hotbed of tech and startup talent in the UK. Its vibrant talent pool, coupled with world-class transport links has made it one of the best cities in Europe to do business in. It is now seen as the regional centre for finance, commercial and retail, with major corporations the likes of the Co-operative Group, Amazon, Royal Bank of Scotland, as well as BBC and ITV setting up key operations within the city. Between 2010 and 2015, Manchester and Salford jointly created some 14,000 jobs in a variety of sectors. With the relocation and start-up of major corporations and small businesses, comes the creation of new jobs. In the shorter term, Manchester is expected to witness employment growth averaging 1.3% during 2018 - 2022, four times the regional average. A study by Cushman & Wakefield predicts that around 3,100 new jobs will be created per year to 2034 across Manchester.
Fast-growing Population With job growth and the strength of its higher learning institutions, there's little wonder that Manchester’s population is growing. From 2002 - 2015, Manchester’s city centre had grown 149% from 14,300 to 35,600 people. When measured by a combination of jobs and population increase, Manchester had seen the fastest city centre growth in England and Wales within that period. The city is on track to experience a 14.1% increase in population between 2018 and 2041.
Quick Facts: Manchester . UK’s 2nd city and one of Europe’s largest, most important tech hubs . One of the world’s top 10 cities for foreign direct investment . A 100,000-strong student population & graduate retention rate of 51%
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House Price Inflation, Nov 2017 & 2018 8% %yoy 12 months ago %yoy current
6%
2%
0%
-2%
Aberdeen
Cambridge
London
Oxford
Southampton
Bournemouth
Belfast
Portsmouth
Bristol
Sheffield
Leeds
Glasgow
Newcastle
Cardiff
Leicester
Liverpool
Nottingham
Birmingham
Manchester
-6%
Edinburgh
-4%
Manchester is among only 4 cities in the UK to chart higher house prices than a year before. Source: Hometrack Nov 2018
Research Report: Manchester
% Year on year
4%
Highest House Price & Rental Growth in the UK Manchester is one of the 4 cities in the UK where high competing land values and policy restrictions cause barriers to development. Thus, in spite of strong demand, pipelines of new stock remain low, resulting in increasing property prices. More than any city in the country, landlords in Manchester are getting the best returns on their investment as house prices have been increasing consistently, exceeding the UK average in 5 out of the last 6 years. In the last 12 months to July 2018, prices had risen just under 9% while London saw a drop of 1%. It is among
only 4 cities in the UK where price growth by Nov 2018 was higher than at the same time in 2017. Regeneration in the city and a severe constraint in housing supply will continue to push property prices. This city is one to watch as residential prices are forecast to grow at an average of 4.2% annually over the next 5 years compared with the 2.4% across the UK.
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Manchester House Price & Rental Growth, 2018 - 2022
22.80%
17.60% 6.50%
House Price & Rental Growth Forecast % p.a
Research Report: Manchester
6
4
4% 3.50%
3.50% 3%
3.50% 3.50%
3.50% 3.50%
3%
2
0
2018
2019
2020
2021
2022
2018-2022*
Manchester is forecasted to show consistent house price growth over the next 5 years, increasing at an average of 4.2% annually compared with 2.4% across the UK. Source: JLL
The cost of renting in Manchester, meanwhile, has gone up by a staggering 30% in the last 4 years. In the 12 months to Sept 2018 alone, rent in Manchester had gone up by 7%, driving among some of the highest rental returns in the UK. A recent survey shows average rental yield of as high as 7% in some areas of the city.
Quick Facts: Manchester . Expected employment growth averaging 1.3% for 2018 - 2022, 4 times regional average . Forecasted 14.1% increase in population between 2018 and 2041 . Residential prices forecasted to grow at a cumulative 22.8% (2018 - 2022)
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Words VIVIENNE PAL
Research VIRATA THAIVASIGAMONY VIVIENNE PAL IAN CHOONG
Design & Layout AHMAD MUNAWAR ABD RAHIM JANE TAN
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