Manchester’s increase in job opportunities and demand for office spaces

October 25, 2023

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Article Summary

Manchester
  • While London tends to house many "front of house" operations, Manchester is experiencing exponential growth in demand for "back office" and support roles.

  • The average rental cost of a two-bedroom flat amounts to 24% of the average monthly income in Manchester, compared to 43% in London.

  • House prices are expected to surge by up to 24.1% in the North West region by 2025, compared to the national average of 15.5%.

Introduction

Recognised for its innovation, Manchester has become a prominent hub for employment nationwide. The Manchester job market is one of the most attractive and desirable in the country, establishing itself as one of the UK’s fastest-growing cities.

Once a thriving industrial hub, Manchester has now shifted its economic focus towards financial services, creative and cultural industries, and the burgeoning technology sector.

 

Employment Opportunities

The Times reports that job seekers are often better positioned in Manchester than in London, highlighting the differing employment prospects of the two cities. Manchester has transformed into a cultural hub, with arts, culture, and heritage sectors significantly contributing to both the city’s cultural landscape and its employment market.

While London tends to house many “front of house” operations, Manchester is experiencing exponential growth in demand for “back office” and support roles, leading to an overall increase in job opportunities.

Manchester drew US$687.6 million in venture capital investment last year, surpassing Cambridge for the first time and now trailing only London in terms of technology investment attractiveness. The city’s economy has flourished, partly due to the rise of eCommerce companies and the continued benefits from its well-established manufacturing infrastructure, resulting in over 16,000 job openings at present.

Cost of Living

Money goes further in Manchester compared to many regions in the South of England. Alongside this financial advantage, there is a superior work-life balance and impressive cost-of-living statistics.

A notable trend in the UK has been the increasing number of individuals relocating from London to cities like Manchester. More affordable housing and thriving local economies have made these areas highly attractive to homebuyers.

The average salary in Manchester stands at £29,000, in contrast to £38,000 in London. Considering that the average rental cost of a two-bedroom flat amounts to 24% of the average monthly income in Manchester, compared to 43% in London, this translates to an annual saving of nearly £10,000.

 

Property Investment Prospects

Manchester is a prime area for buy-to-let property investment, primarily due to the city’s ongoing population growth and the substantial student population choosing to remain in the area.

A recent report from JLL forecasts that Manchester will experience the highest sales and rental price growth of any UK metropolitan area over the next five years. House prices are expected to surge by up to 24.1% in the region by 2025, compared to the national average of 15.5%.

With Manchester City Council anticipating an additional 5,000 people moving to the city centre annually until 2025, the demand for housing, especially among young professionals, is set to soar. The benefits of investing in Manchester and capitalising on the projected appreciation are abundantly clear.

In a noteworthy uptick, the third quarter of 2023 witnessed robust leasing activity, with occupiers securing a total of 351,000 sq. ft – a remarkable surge of 172,000 sq. ft compared to the preceding quarter, as reported by the Manchester Office Agents Forum.

City centre letting activity in the same period also demonstrated a significant year-on-year increase, surpassing the 326,000 sq. ft transacted during the corresponding period in 2022. Over the past three months, a total of 59 deals were successfully executed, with a notable share allocated to two education providers.

Predictions by industry experts suggest that Manchester’s take-up of office space may well surpass the remarkable 1 million sq. ft mark by the end of this year. After three quarters, the cumulative take-up currently stands at an impressive 721,000 sq. ft.

Upcoming GMPF Project

The Greater Manchester Pension Fund (GMPF) is set to inject £150 million into a joint venture integral to one of the region’s most significant regeneration projects. This venture, known as Bruntwood SciTech, represents a collaboration between property industry titan Bruntwood and Legal & General. Both these organisations have also bolstered their contributions, infusing an additional £350 million into the venture.

What’s particularly noteworthy is that GMPF marks the first local government pension scheme to actively engage in a direct investment within a UK-wide specialist property platform focused on science, technology, and innovation. Bruntwood SciTech has set an ambitious goal to develop a £5 billion portfolio spanning the entire UK, poised to support 2,600 businesses by 2032.

Among Bruntwood SciTech’s ambitious projects is the £1.7 billion ID Manchester initiative, strategically positioned to cultivate an ‘innovation district’ between the Mancunian Way and Piccadilly Station. This transformative development is slated to overhaul the University of Manchester’s north campus, replacing concrete edifices with a sprawling 4 million square feet of educational facilities, retail spaces, and residential accommodations. It will be one of many new developments built to combat Manchester’s growing office space problem.

To find out about more of some of the most attractive new-build and regeneration projects that the UK has to offer, click here.

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