Manchester Monitor March 2014
Commercial property demand on the rise
Jobseeker numbers rise as seasonal employment ends Office take-up increases in 2013 Annual passenger numbers increase at airport House prices starting to rise Increase in assault attendances www.neweconomymanchester.com research@neweconomymanchester.com
Monitor Focus Commercial property demand on the rise CBRE’s latest assessment of the commercial property market suggests that demand for office space in Manchester has strengthened since the end of the summer, with takeup in 2013 surpassing 2012 levels. Signs for 2014 are also more encouraging, with a number of larger requirements likely to drive demand over the next few months. Overall take-up for the whole year was around 890,000 sq. ft, 13.0% higher than the figure of 770,000 sq. ft in 2012. The Financial Times recently reported that with commercial property prices continuing to rise in London and the South East, investors are starting to look at other parts of the country as they become less risk averse because of the growing economy. Significantly, the capital value of all three segments of commercial property (retail, office and industrial) increased in the latest quarter outside London and the South East – the first time the increase happened across all segments in three years. The residential property market in GM is starting to show signs of recovery following a prolonged period of stagnation. The average house in GM cost just over £104,000 in January 2014, a rise of 1.8% (£1,800) on the same month last year. This is still significantly cheaper than the England & Wales average price of around £168,000, and an increase in the number of properties sold in the conurbation suggests that more people are now getting on the housing ladder as government-backed schemes such as Help to Buy boost sales. In terms of the wider economy, indicators around business confidence and economic growth all suggest a continuation in the improving economic climate. The Office for National Statistics left GDP growth for Q4 2013 at 0.7% in its second estimate, although it downgraded growth for the year from 1.9% to 1.8%. Even at the lower rate it was the strongest year for growth since 2007, and reflecting a more optimistic outlook, the Bank of England has revised its growth forecast for 2014 to 3.4% from 2.8%. At a GM level, the latest figures show just over 65,000 people were claiming Jobseeker’s Allowance (JSA) in GM in January – an increase of 1,800 (2.9%) when compared with the figure for December 2013 of 63,300. A monthly increase in JSA numbers during January is common, resulting from seasonal
1 | Manchester Monitor – March 2014
jobs associated with the Christmas holiday period coming to an end. The North West (3.2%) and Great Britain (3.5%) saw even larger monthly increases. More encouragingly, the number of JSA claimants in GM is 20,000 less (23.4%) than 12 months ago. The improving economic climate (increased business confidence, growing GDP, etc.) means it is reasonable to expect that claimant numbers will start to fall again in February/March. The GM visitor economy continues to perform well, with Manchester Airport’s passenger numbers totalling 20.8 million in 2013. This represents an increase of just over 1 million passengers on the 2012 figure, or growth of 5.5%. Growth was also higher than airports elsewhere, such as Gatwick (3.5% growth) and Heathrow (3.3% rise). The last time passenger numbers over the course of a calendar year were as high at Manchester Airport was in 2008. Further growth in passenger numbers is expected over the coming months at the Airport, with new routes being added to destinations such as Charlotte in North Carolina, Toronto, Bologna, Catania in Sicily, Vienna and Bergerac in Jersey. Hotel occupancy data for January 2014 show that occupancy in the city centre was steady with 2013 levels at 63%, whilst occupancy for GM as a whole was slightly higher for 2014 – up to 63% from 62% over the year. As is usually the case, the highest levels of hotel occupancy in January coincided with sporting events, with Manchester United and Manchester City playing matches at Old Trafford and the Etihad Stadium respectively. Finishing with the regular look at crime data, in the 12 months ending December 2013, around 12,000 people were treated for assault-related injuries in GM hospitals, an increase of 3.7% on the figures from the previous year. Just over half (6,200) of assault patients were aged 15–29. The same demographic comprises just 21.5% of the GM resident population as a whole according to the latest ONS estimates, highlighting that 15–29 year olds remain particularly vulnerable to violence. Despite this, the proportion of 15–29-year old victims is currently at its third lowest level since 2009.
Monitor Dashboard Jobseeker’s Allowance (JSA) claimants
Airport Passengers
23.6%
5.5%
since last year
since December 2012
Office Take Up
Hotel Occupancy
1%pt
13.0% on 2012 -
in GM on January 2013
890,000 sq. ft in 2013
House Prices
Crime Volume
1.8%
2.2%
since January 2013
since January 2013
Manchester Monitor – March 2014 | 2
People Monitor Jobseeker numbers rise as seasonal jobs come to an end According to the latest figures just over 65,000 people were claiming Jobseeker’s Allowance (JSA) in GM in January – an increase of 1,800 (2.9%) when compared with the figure for December 2013 of 63,300. A monthly increase in JSA numbers during January is common as seasonal jobs associated with the Christmas holiday period come to an end. More encouragingly, the number of JSA claimants in GM is 20,000 less (23.6%) than 12 months ago.
As a proportion of the resident working-age population, 3.7% of people in Greater Manchester were claiming JSA in January – which remains higher than the North West (3.4%) and Great Britain (3.0%). The number of male JSA claimants in GM increased on a monthly basis by 3.2% (1,300) to 42,800, while the number of female claimants rose by 2.3% (500) to 22,300. More positively, there was a year-on-year fall in male JSA claimants in GM of 14,600 (25.5%). The number of female claimants also fell year-on-year, and is now 19.8% (5,500) lower than this time last year. Youth unemployment (JSA claimants aged 16–24) in Greater Manchester increased on a monthly basis between December and January, rising by approximately 260 to around 15,600. On an annual basis however, the number of youth JSA claimants is now 32.2% (7,400) lower than this time last year. By contrast, long-term (6 months+) claimants in Greater Manchester increased only marginally in January 2014 to 29,300, up by 150 (0.5%). On an annual basis the number of long-term claimants is 20.2% (7,400) lower. The North West (20.7%) and Great Britain (19.4%) also saw similar annual declines in long-term claimants. Compared to the situation 12 months ago, the labour market does now look to be in a stronger position. The rise in JSA claimants in January is the normal seasonal consequence
of temporary Christmas jobs coming to an end. The improving economic climate (increased business confidence, growing GDP etc.) means it is reasonable to expect that claimant numbers will start to fall again from February/March onwards. According to the Office for National Statistics, average weekly pay including bonuses grew by 1.1% to £478 in the three months to the end of December, up from the 0.9% increase in the three months to the end of November. While the increase is encouraging, wages are still not keeping up with the cost of living – the government’s preferred measure of inflation, the consumer price index, currently stands at 1.9%. Vacancies Data Labour Insight reveals that there were 21,465 job openings in GM in January 2014, down by almost one quarter (-6,500) on the same month last year. It should be noted that vacancies data tend to fluctuate more than employment data, although regular analysis provides a useful indicator on current labour market opportunities at any given time. In particular, the highest proportion of vacancies in January 2014 were in professional occupations (one third, or 7,150), followed by associate professional & technical roles (21.7% 4,600).
Jobseeker’s Allowance - Annual Change
Total Jobseeker’s Allowance Claimants in January 2014
65,094 Decreased by 23.6% year-on-year
Vacancies - Annual Change Women
Men
Youth
$19.8% $25.5% $32.2% $20.2%
$23.4% 1
Source: Labour/insight (Burning Glass Technologies)
3 | Manchester Monitor – March 2014
Long-term
Business Monitor Energy, 5% Professional Services, 4%
Banking & Finance, 9%
Business Services, 32%
Manufacturing, Industrial & Energy, 24%
Office take-up in Manchester, 2013: 890,000 sq. ft
Insurance, 3%
Consumer Services & Leisure, 20%
Computers/Hi Tech, 3%
Office take-up increases in 2013 According to CBRE’s latest assessment of the property market, demand for office space in Manchester has strengthened since the end of the summer, with take-up in 2013 surpassing 2012 levels. Signs for 2014 are also more encouraging, with a number of larger requirements likely to drive demand over the next few months. Office take-up in Manchester was around 414,000 sq. ft in the second half of 2013. While this was slightly down on the first half of the year (472,000 sq. ft), overall take-up for the whole year was around 890,000 sq. ft. This was 13.0% higher than take up in 2012 of just over 770,000 sq. ft. Total available office space in Manchester stood at 2.55million sq. ft in the second half of 2013, marginally lower than at the end of the first half, but 12% down since the end of 2012. Headline prime rents for office space in Manchester were stable throughout 2013 at £30.00 per sq ft. However, CBRE’s assessment notes that there are signs of Grade A rents improving. It expects the One St Peter's Square development to push prime rents up to £31–32 per sq. ft during 2014. In addition, incentives on Grade A are starting to reduce as the amount of good quality space is declining according to CBRE.
Looking ahead to future take-up and requirements, CBRE expects to see Project Digital finally come to fruition in 2014. If it goes ahead, the deal would involve space being taken across 20 buildings and take around 150,000 sq. ft of space. The Financial Times recently reported that with commercial property prices continuing to rise in London and the South East, investors are starting to look at other parts of the country as they become less risk averse because of the growing economy. The FT notes that the capital value of all three segments of commercial property (retail, office and industrial) increased in the latest quarter outside London and the South East. The analysis was based on data sourced from IPD, which analyses real estate performance. Significantly, this was the first time the increase happened across all segments in three years.
Manchester Monitor – March 2014 | 4
Place Monitor Annual passenger numbers increase at Airport The latest monthly airport data from the Civil Aviation Authority reveal that Manchester Airport saw more than 20 million passengers through its doors in 2013, the first time this has happened since 2008. Hotel occupancy data for January 2014 show that occupancy in the city centre was in line with 2013 levels, whilst occupancy for GM as a whole was slightly higher for 2014. Airport Passenger Numbers
Hotel Occupancy
Over the whole of 2013, Manchester Airport’s passenger numbers totalled 20.8 million. This represents an increase of just over 1 million passengers on the 2012 figure, growth of 5.5%. This was higher than airports elsewhere, including the London airports, with Gatwick experiencing growth of 3.5% and Heathrow 3.3%. The last time passenger numbers over the course of a calendar year were as high at Manchester Airport was in 2008.
Hotel occupancy rates in Manchester city centre were recorded at 63% in January 2014, the same rate as the corresponding month last year. Weekend occupancy in the city centre averaged 62% during the month, down seven percentage points on the January 2013 figure of 69%. The weekday average occupancy in the city centre was 64%, up three percentage points since January 2013.
In terms of the monthly data, Manchester Airport handled 1.3 million passengers in December 2013, 5.5% (70,000) higher than 12 months previously. The annual growth in passenger numbers at Manchester Airport between December 2012 and 2013 was higher than at some of the other UK airports, such as Heathrow (2.8%) and Gatwick (4.7%). Stansted and Birmingham recorded slightly higher passenger growth of 7.8% and 7.6% respectively over the same period. Further growth in passenger numbers is expected over the coming months at the Airport, with new long-haul routes being added to destinations such as Charlotte in North Carolina, America and Toronto, Canada. Ryanair is also scheduled to launch four new routes to Barcelona, Bologna, Fuerteventura; Easyjet is introducing a new route to Catania in Sicily and Jet2.com will be introducing direct flights to Vienna and Bergerac.
Airport passenger numbers
(+5.5%)
For GM as a whole, average occupancy rates in January were 63%, a rise of one percentage point compared to the previous 12 months. Key dates for hotel occupancy in the city centre during January were: • 22 January – occupancy of 94% was achieved, boosted by Manchester United playing in the Capital One Cup and the National Cycling Centre hosting the Manchester Beer & Cider Festival. • 25 January – 81% occupancy was recorded, with Manchester City playing at home in the FA Cup. On the same date EventCity hosted the Holiday & Travel Show, as well as the Caravan & Motorhome Show. • 28 January – 91% occupancy was recorded, which coincided with Manchester United playing a home match against Cardiff City in the Barclays Premier League.
Hotel occupancy (city centre)
1,335,923
63%
Flights
Hotel occupancy (GM)
(+0.8%)
10,730
63%
% represents year-on-year change
IMPORTANT NOTE: The source of the hotel occupancy data referenced in this newsletter is STR Global Ltd. Republication or other reuse of this data without the express written permission of STR Global is strictly prohibited.
5 | Manchester Monitor – March 2014
(0% pts)
(1.0% pt)
Housing Monitor % Change in House Prices, January 2013-14 5.0% England & Wales (4.2%, £6,700) 4.0%
3.0%
2.4% (£3,500) 1.8% (£1,800)
2.0%
0.6% (£650)
1.0%
0.5% (£480)
0.1% (£100)
0.0% 0.0% (£-) -1.0% Cheshire West & Chester
Greater Manchester
Merseyside
Lancashire
Cumbria
Cheshire East
House prices starting to rise The latest data from the Land Registry show that the average house in GM cost £104,393 in January 2014, a rise of 1.8% (£1,797) on the same month last year. This is well below the England & Wales annual rise of 4.2% (£6,723), with house prices reaching £168,356. At a sub-regional level within the North West, Cheshire West & Chester recorded the fastest rate of growth in house prices at 2.4% (£3,500) between January 2013 and 2014. GM’s growth of 1.8% was second fastest, with much lower levels of growth in Merseyside (0.6%), Lancashire (0.5%) and Cumbria (0.1%), and no change in Cheshire East over the same timeframe. London continues to see the largest house price rises of any region, with an annual increase of 10.9% (£40,000). A typical property in London cost £410,000 in January 2014, and the last time it saw prices fall on a yearly basis was in September 2009. Land Registry house sales data reveal that there were 3,025 properties sold in GM in November 2013, a much larger annual increase of 21.3% (532) than seen for prices. This is also reflected in the picture for the North West (26.0% or
1,759) and nationally (22.5% or 14,405), which both saw year-on-year increases in house sales. One of the main drivers behind the rise in property sales has been the government’s Help to Buy Scheme. Research by Genworth, a mortgage insurance provider, found that buyers with only a 5.0% deposit can now choose from 132 different deals. In September last year, before Help to Buy, there were only 43 products on the market. Despite the rise in house sales, data from the recent English Household Survey show that home ownership has fallen to its lowest level for a quarter of a century. The overall number of homes lived in by owner-occupiers has fallen from 71.0% in 2003 to 65.2% in 2013, the lowest level since 1987. By contrast, the number of people living in private rented accommodation has risen from 2.2 million in 2002/03 to nearly 3.9 million last year.
Manchester Monitor – March 2014 | 6
Crime Monitor Assault Attendances at GM Emergency Departments, by Age Group 6,249 6,234
3,193
3,375
1,407 608
1,586
636 275
0-14
15-29 January 2012-December 2012
30-44
45-59
342
60 and Over
January 2013-December 2013
Increase in assault attendances The latest figures in relation to assault attendances at each of GM’s eight hospital trusts’ local emergency departments show that there has been a year-on-year rise in the number of people being treated for assaults over the last twelve months. Crime volumes continue to fall in terms of total offences reported. Assaults Data Data for the 12 months ending December 2013 show that around 12,000 people were treated for assault-related injuries in GM hospitals, an increase of 3.7% on the figures from the previous year. This total, whilst a decrease on the previous two months, still represents the third highest rolling figure since May 2011, and follows a trend wherein figures have been increasing since November 2012. Analysing the data in further detail, in the 12 months to December 2013, 51% (6,200) of assault patients were aged 15–29. The same demographic comprises just 21.5% of the GM resident population as a whole according to the latest ONS estimates, highlighting that 15–29 year olds remain particularly vulnerable to violence, though the proportion of 15–29-year old victims is currently at its third lowest level since 2009. Crime Volumes Figures for the year ending January 2014 show that there were around 180,400 reported crimes in GM, representing an annual decline of 2.2% (4,060) fewer offences. Victim-
7 | Manchester Monitor – March 2014
based crimes (stealing, criminal damage & arson, violence, and sexual offences) saw just over 162,500 cases recorded over the same period, representing an annual fall of 0.5%. While overall volumes of crime decreased, the number of sexual offences increased by 17.5% (470) across GM during the year to January 2014, possibly due to more high profile sexual offences being reported in the period. The number of stealing offences also rose by 2.7% (2,625) over the same period. Fire & Rescue Service Data GM Fire and Rescue Service data show that for the year ending January 2014, deliberate fires in GM were recorded at 9,092, compared to a figure of 7,758 for the previous year, an annual rise of 17.2% (1,334). Primary fires, however those where owned property is involved – were recorded at 4,954 for the year ending January 2014, a year-on-year fall of 5.1% (-267).