The Investment Case For Manchester

26 February 2016

Find out how huge levels of investment, a thriving economy and a vibrant culture are making Manchester a city that property investors cannot ignore.

In December 2014, the Chancellor of the Exchequer, George Osborne, announced an ambitious GBP7bn investment plan to make Manchester the ‘Powerhouse of the North’. Over a year on and there is no doubt that Manchester is already well on its way to being one of the most important cities in Europe.

With huge levels of domestic and international investment, a young workforce, plus historic levels of population and employment growth, the UK’s second capital city provides a safe investment opportunity. Rivergate House at Wilburn Wharf is a striking new-build waterfront development offering exceptional value to enter the Manchester property market, with a rental yield of up to 5.48% and up to 75% LTV.

EDUCATION & YOUNG WORKFORCE

Manchester has long been held in high esteem for the quality of its higher education. In total Manchester University boasts an impressive 25 Nobel Prize winners among its current staff, students and alumni and is the largest single-site university in the UK, with the biggest student community.

The splitting of the atom was first achieved by Ernest Rutherford there in 1919 and John Dalton pioneered the modern atomic theory –as well as discovering colour blindness– while he was a member of the Manchester Literary & Philosophical Society and a tutor at New College, Manchester.

With such a rich academic history, it is no surprise that Manchester has one of the largest student populations in Europe, with over 100,000 students attending institutions such as the University of Manchester, Manchester Metropolitan University, the University of Salford and The Royal Northern College of Music; one of Europe’s leading international music conservatoires.

With such a rich academic history, it is no surprise that Manchester has one of the largest student populations in Europe, with over 100,000 students attending institutions such as the University of Manchester, Manchester Metropolitan University, the University of Salford and The Royal Northern College of Music; one of Europe’s leading international music conservatoires.

Manchester has seen a 40% growth in its 20-25 year-old demographic since 2001, with students increasingly remaining in the city after graduation. More than 70% of Manchester Metropolitan University graduates stay in the Northwest after graduation and the city is now targeting investment in business sectors that will create more graduate opportunities. Statistics suggest that 40% of Manchester's resident population is aged 25 or under . This, combined with the success of Manchester’s educational institutions has contributed to Manchester recently becoming the first UK city to ever be shortlisted for the award of European Youth Capital (2018).

KEY INDUSTRIES

Manchester has been an industrial hub for the UK ever since it gave birth to the Industrial Revolution in the 18th Century. Today, Manchester is still a world-class city for business and industry, and retains its position as the largest UK economy outside of London. As well as a number of FTSE100 companies, around half of the Top 500 businesses in the Northwest of England have located themselves in Manchester . Recently large multi-national businesses such as Google, Siemens, the BBC and the Royal Bank of Scotland have all relocated thousands of jobs to Manchester, and companies such as Kellogg’s, The Co-operative Group, Brother, Britannia Hotels, and Adidas all already have their national or international head offices in Manchester or Greater Manchester.

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FINANCIAL & PROFESSIONAL SERVICES

Manchester has the UK’s largest Financial & Professional Services industry outside of London, employing 324,000 people, and in recent years this sector has grown faster than in any other UK city. It now comprises 17% of all jobs in Manchester and employs over over a quarter of a million people, whilst contributing GBP15.5bn to the total UK GVA per annum.

CREATIVE & CULTURAL INDUSTRIES

Manchester is the UK’s largest hub 
for the creative and cultural industries outside of London, employing 62,000 people and contributing
GBP3bn GVA per annum. Tourism is worth GBP6.6bn a year to Greater Manchester and much of this is generated or supported by Manchester’s position as a European cultural hotspot. Already home to a vibrant network of museums, art galleries, music venues, theatres and Manchester International Festival, Manchester is set to unveil a GBP110m arts centre in 2019, called The Factory. The project will create over 2500 jobs, adding GBP138m a year to the UK economy.

SCIENCE, RESEARCH & TECHNOLOGY

Historically Manchester and the development of human knowledge has always gone hand in hand, today Manchester is still one of the UK’s most innovative centres for science and technology research. Biotechnology and Energy have become one of the regions most productive sectors and other niche specialist sectors are following close behind, such as software development, electronics, environmental technologies and chemicals.

Manchester has also become the international headquarters for the The Square Kilometre Array (SKA) project, which is deemed to be the largest experiment in the history of science, making use of the largest radio telescope ever created. The city is also home to the GBP61 million National Graphene Institute and the GBP235 million Sir Henry Royce Materials Research Institute.

OVERSEAS INVESTMENT INTO MANCHESTER

Manchester is home to thousands of foreign owned businesses such as AON, Cisco and Google, but it it is also the recipient of millions of pounds of foreign investment. China’s President Xi Jinping’s visit in October 2015 – the first visit of any Chinese President to the city – resulted in Manchester being at the heart of a number of the GBP40bn worth of commercial deals agreed during his trip. One such deal was Beijing Construction Engineering Group’s (BCEG) substantial share of the GBP800m investment raised to develop the 'Airport City' business park project at Manchester Airport. BCEG have invested GBP130m to develop two new business areas covering 45,000 sq. metres of space, and to be called Wuhan Square and Shenzhen Gardens. This new ‘China Cluster’ at Manchester Airport will act as a commercial base to attract Chinese businesses to the UK and build strong commercial relationships between Manchester and Beijing.

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Following on from the launch of Cathay Pacific’s direct flights between Manchester to Hong Kong in December 2014, President Xi Jinping’s visit also coincided with Hainan Airlines announcement that they will begin direct flights to Beijing from June 2016, which will further strengthen business ties between the two cities, bringing in an estimated GBP250m of economic benefits to the UK by 2026.

Football is another area that the Chinese government and investors are keen to explore and after President Xi Jinping’s tour of Manchester City’s Etihad stadium, it was announced that China Media Capital Holdings (CMC) would be investing GBP265m into Manchester City FC.

More investment in Manchester from Far Eastern businesses can be found in the form of Singapore’s Rowsley Ltd. estimated GBP40m backing into the transformation of the area surrounding what was Bootle Street Police station. Teaming up with former Manchester United legends Gary Neville, Phil Neville, Paul Scholes, Nicky Butt and Ryan Giggs, the group will develop a multi-use building to be known as St Michael’s in Manchester city centre, that will consist of a 5-star hotel, luxury apartments, office spaces and restaurants.

Middle Eastern businesses have also shown a strong interest in investing in Manchester with the Graphene Engineering Innovation Centre receiving GBP30m from Masdar , an energy company based in Abu Dhabi, and Bahrain-based Ibdar Bank investing GBP8m into the development of Angel Gardens, a complex of 458 brand-new residential apartments in the city centre.

However, the most influential investment into Manchester from a Middle Eastern business has come from the Abu Dhabi United Group, owned by Sheikh Mansour bin Zayed Al Nahyan. Abu Dhabi United Group’s purchase and investments into Manchester City FC and Manchester City Women’s FC has contributed not only radical changes on the football pitch but also radical changes to the city. The group’s recent investment, alongside Manchester City Council, into a new company called Manchester Life , will see the firm aim to raise GBP1bn worth of investment to completely redevelop the areas of Ancoats and New Islington in east Manchester, building 6000 new homes and setting a new benchmark for Manchester’s housing in the process.

CULTURE AND LIFESTYLE IN MANCHESTER

Manchester has already established itself as a ‘powerhouse’ of northern culture and with the creation of The Factory theatre, and ever increasing audiences for cultural events, it will soon rival the greatest cities in the world.

As well as shaping the UK’s television services by being home to the BBC at MediaCityUK, ITV and Granada Television, Manchester has also shaped the music industry on more than one occasion. The Manchester Free Trade Hall was the venue where “everyone” first saw the Sex Pistols perform and it was also the scene of Bob Dylan infamous Judas accusation, but the region has also nurtured some of the world’s most famous bands, including The Smiths, Oasis, The Stone Roses, Joy Division, New Order, Happy Mondays and Simply Red. Manchester’s live music scene is carrying on in its legendary tradition with MEN Arena now being declared Europe’s busiest indoor concert venue ahead of the O2 Arena in London.

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In addition to hosting the Manchester International Festival, Manchester Literature Festival, Manchester Jazz Festival, Manchester provides endless cultural activities and sites for its young residents and tourists, including some of the UK’s finest museums and cultural landmarks, like Manchester Museum, the Museum of Science & Industry, Imperial War Museum North, Urbis Exhibition Hall and the National Football Museum.

It is also home to the oldest library in the English speaking world (Chetham’s Library), the 2nd largest largest Chinatown in the UK (3rd largest in Europe), 2 of the UK’s most spectacular Football Stadiums (Old Trafford and the Etihad), the UK’s largest theatre space outside of London (The Lowry), the 2nd largest indoor shopping centre in the UK (The Trafford Centre), a popular gay quarter (Canal Street) and the famous ‘Curry Mile’.

With over 28,000 new residents set to make thriving  Manchester their home in the next decade and the current construction pipeline providing less than half of the required new units to meet this booming demand, now is the time to invest in Manchester property. Spacious new-build apartments such as those at Rivergate House in Wilburn Wharfare perfectly positioned in the centre of a city that is on the cusp of a historical transformation. For further information about this exciting new opportunity, request a brochureor speak to our property experts directly at info@ipglobal-ltd.com.

MANCHESTER MARKET UPDATE

Find out why Manchester is considered to be the “capital of the North”.

Roxanne O'Fee

Written by Roxanne O'Fee

Roxanne' analysis of key UK, European and Australian markets has served as the foundation for some of IP Global's most important investments, and has seen her play a central role in the business’ UK regional cities strategy. Roxanne’s work has also extended to the project management of several key investments, and sees her currently involved with the company’s real estate fund operations.

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