‘The Northern Powerhouse’ as coined by Chancellor George Osborne is the term now commonly used referring to the combination of northern cities Manchester, Leeds, Liverpool, Newcastle, Sheffield and Hull- a combined population of over 15 million. Northern England currently produces £287 billion GVA, but with proposed new transport links between the cities designed to improve the rail and roads and to the airport, the unified North is set to be a major player to rival London.
A report published by Lambert Smith Hampton (LSH) shows that occupier and investor confidence across the region’s office markets is riding high from 2015 through to 2016. The report displays strong performance across key markets, predicting expected take up to reach 5.2m sq ft by the end of the year, which in comparison to 4.6m sq ft in 2014, is quite a significant achievement: actually 30% above the 10 year average. These promising statistics within the report more than go to prove that occupier confidence in the region is riding high.
Manchester city centre leads the way in office markets results, being set for a record year, with close to 1.4m sq ft of office space expected to be let or sold by the end of the year, well above the 10 year annual average 966,000 sq ft.
Leeds, Sheffield and Newcastle also show promising rises, with only Liverpool to fall slightly below the annual average.
Tony Fisher, National Head of Office Agency at LSH was quoted in the report:
“The office market across the Northern Powerhouse is undoubtedly in a strong position. Confidence is high and the best performing cities are benefiting from strong demand. Both in the traditionally dominant sectors of finance and professional services, as well as emerging sectors like Technology, Media and Telecommunications (TMT).”
The Northern Powerhouse seems to be already challenging London, with London-based companies looking to reconfigure regional operations out of London in order to avoid the rising costs of our country’s capital. Manchester city centre is feeling the effects of this the most, with demand being high: set to reach its highest annual total on record. Leeds is also predicted to be 30% above the 10 year average as well as Sheffield also showing promising increases, these 2 cities have their thriving universities to thank for these positive statistics. With the house prices to income balance being barely half what it is in London, The North provides a great place for skilled workers to settle in the region and enjoy a better quality of life.
Fisher goes on to say “With a rise in the number of London-based companies looking to rebalance their regional operations, largely to avoid the rising costs of the Capital, it bodes well for sustaining the Northern Powerhouse initiative in the coming months and years.”
Investment in the area is at a record high, set to reach £1.42bn, a record high.
Abid Jaffry, Head of Capital Markets in the North West at LSH, explained in the report: “Investment in the region is high, which has unsurprisingly been led by Manchester. However, pricing in the city is now reaching record levels. As a result it is likely we will see more investment in the other Northern Powerhouse cities in the near future as investors chase value through the emerging yield gap; as evidenced by the recent sale of Ventana House in Sheffield for £14m.”
Anderton Gables is the market leader for the Northern Powerhouse Region as commercial building surveyors, Commercial Property Surveyors and project and development consultancy. Being a northern based company, the commercial building surveyors have offices in Preston and Manchester’s city centre, having expert local knowledge of the area. Bringing together their knowledge and skills within the Commercial Building Surveying field, they provide award winning property and construction consultancy for both large multi-national companies as well as small to medium sized business.
Andrew Whittle, head of the Project + Development Consultancy service Anderton Gables comments,
“The Northern Powerhouse is already showing exciting improvements in the commercial property market, the report published by LSH shows what we already knew. We are proud of our region’s success in the battle against London and as commercial building surveyors in the North, we are eager to assist our clients in benefitting from market shift towards our region in the year ahead.”
For more information about Anderton Gables’ commercial building surveying services click here