Supply and demand

Creatives are flowing into Manchester and the wider North of England, but is there space for them?

WordS: DavID thame

Want a design studio in Manchester? It ought to be an easy ask. A city buzzing with both property development and creative life – and the focus of a regional digital, media and creative sector worth a shade under £5 billion – the list of property options should be breath-taking. Yet it just isn’t. And the problem is the same in Liverpool, Leeds and across the major Northern cities.

Worse still, this potential headache could become a more serious crisis. The relocation of Channel 4 to Leeds, and the opening of Manchester’s new £210 million Factory International arts centre, can only stimulate demand from expanding London practices and homegrown talent.

The lure for design talent heading North is the fastexpanding regional economy. In the creative sector alone, the North West boasts 155 scaling-up businesses worth £2.3 billion a year to the regional economy, according to a Greater Manchester Combined Authority report published last year.

Unusually, the difficulty shared by new arrivals and indigenous businesses isn’t one of money. Compared to the £60/sq ft rents routinely faced in central London, Manchester’s top rent is £40/sq ft and, in many cases, creatives will be paying much less. For instance, if you want fitted ready-to-use office space off Manchester’s Deansgate, you can find it for an all-in cost of £16/sq ft at North Parade, Parsonage Gardens. Anything fancy will cost a good deal more, but still less than central London. At the upper end of the price spectrum, design studios have some appealing choices. For instance, in July 2021, AEW Architects decided to take the 5,300 sq ft seventh floor of Manchester’s recently refurbished Trinity building, John Dalton Street.

In the immediate post-COVID aftermath the practice wanted to set new standards for wellbeing and collaboration. It meant less but smarter floorspace, for the 75-strong team who now occupy a suite 2,000 sq ft smaller than the old home. But the new premises come with a rooftop terrace and three outdoor balconies, and relatively few fixed workstations. It has been a hit with staff.

Not every potential occupier is so lucky. Laura Brown is co-author of the report State of the Studios Merseyside, an analysis completed in 2021. Her analysis suggests that the returns to be made from studio space simply don’t match the returns landlords can earn from other uses. The result is that studio space goes to the back of the queue.

“For a studio to charge rent the same as they would for, say, an SME (small and medium sized enterprise) or even a hot desk commercial space, simply wouldn’t be viable,” she says.

Landlords and developers are aware of the problem –and working on solutions – says Adam Higgins, cofounder at Capital&Centric, who are at work on studiofriendly schemes across the North. He says it makes commercial sense to switch from big ritzy office blocks to smaller creative spaces.

“Commercial property has to rise to the challenge of the creative industries boom – the days of the big floorplate seem dead for now. For start-ups in high growth industries, that’s smaller, flexible and coworking spaces, ideally in cheaper and up-and-coming parts of the city,” Higgins says.

“The design of spaces is also essential too, with larger organisations going for smaller spaces as a result of hybrid working. They’re willing to pay more for high quality interiors, original features and communities that have a creative edge, over a bog standard whitewash office with a suspended ceiling.”

In Manchester, Higgins is working to restore Chapeltown Warehouse in Piccadilly East into workspaces with a ground floor bar or deli.

“We expect that’ll be taken up by the creative industry set, who want a space with historic character that they can put their stamp on,” he says.

Sheffield was named last year as the best place to start a business outside London, with tech and gaming industries to the fore. Naturally, developers have spotted an opportunity.

Says Higgins: “We’re already on site delivering the types of city centre homes that creatives want to live in, but we’re also looking at what to do at Cannon Brewery – a sprawling space with bags of opportunity in the city’s Neepsend area.”

The legacy of the North’s industrial heritage provides plenty of buildings like the Brewery. Liverpool, Manchester, Bradford and Leeds have abundant supplies of ‘repurposable’ Victorian blocks of the kind creative occupiers love.

Emily Jones, director at developer Urban Splash, says she plans to further update industrial buildings like Beehive Mill and Waulk Mill in Ancoats (Manchester), and the Ropewalks area of Liverpool.

“We are also increasingly offering fitted-out workspaces and a desire from creative businesses to move into turnkey office,” she says.

“But while the aesthetics are important, so too is the approach of landlords. COVID altered the status quo, and occupiers in the creative sector want freedom to grow and move their business, that means short form leases and an open dialogue that can accommodate change.

“Add that to the cultural landscape in each city, where institutions such as Factory bring new opportunity to creative businesses, and it’s easy to see the North’s appeal.”

The area around Factory International will be a focus for those creative occupiers with generous budgets. New floorspace in the St John’s area appeals to the larger international occupiers and is priced accordingly.

Lee Treanor, Director at HBD, explains: “It’s clear that certain quarters of the city are attracting specific industries - St Johns is quickly establishing itself as a location for technology, media and cultural organisations on the back of Factory, which was a huge coup for the city.

“It’s exciting to see the St Johns district beginning to evolve and develop its own identity, building on the success of neighbouring Spinningfields, which has been a corporate stalwart for more than a decade –and with a range of occupiers including Soho House, WPP and Booking.com already in situ, it is gaining some critical mass.”

Ultimately the supply of new creative floorspace depends on the mostly international investors who fund property development in the North. And here the news is relatively good, as the AEW example shows.

AEW’s office move was one of the last pieces in the jigsaw for landlord Helical. With the architect signed up, Helical could sell the block for the healthy price of £34.5m, a serious uplift on the £12.9m it paid in 2017. Even allowing for the cost of comprehensive remodelling and refurbishment at the 59,000 sq ft, eight-storey block, Helical turned a profit.

Impressive numbers like these will attract more money to develop in the major Northern cities, not least in Manchester where the returns are highest and most assured. And with the flood of money comes a much improved chance that the studio spaces the creative sector needs will get built.“