Cushman & Wakefield gives its predictions for what’s in store for the North West’s property market in 2019.
Caroline Baker, Head of Cushman & Wakefield’s Manchester office and Partner in the Development & Planning Team commented: “It is not difficult to predict that 2019 is likely to be another difficult year for the retail sector. However, the key to success in 2019 will be to see this as an opportunity to reposition our town centres.
“I predict that 2019 will be a year when the institutions and investors – which have so far only been interested in the regional centres – start to look at the next tier of town centres. The key is to focus on those towns that have great connectivity, access to jobs and access to local services combined with unique assets which make them standout. Where partners come together and set a new vision for these towns with a passion and commitment to work together, transformation will happen.
“We need to get more people living in our town centres but many lack quality homes or have limited choices. We need to deliver modern homes which attract a wider range of occupiers – young families, down sizers etc. Savvy developers will start to develop residential products which respond to the desires of those residents who get the benefits of town centre living or maybe don’t have the resources or desire to live on the 25th floor of an apartment block in Manchester or Liverpool. Where this starts to happen the bars and restaurants will follow and our towns will be vibrant again.”
Caroline Baker has prepared strategies to support the transformation of towns including Altrincham, Leigh, Preston and Crewe and is currently working on strategies for Barrow, Kendal, Stockport, Macclesfield and Stalybridge.
Rob Yates, Partner and head of North West office agency at Cushman & Wakefield, said: “Currently there is only 166,500 sq ft of immediately available Grade A accommodation in central Manchester, several transactions will complete by the year end and will result in an complete absence of ‘ready to occupy’ supply in the market by early 2019.
“Two new developments are under construction that will deliver circa 300,000 sq ft to the market by autumn 2019 but we expect the majority of new stock could be let before practical completion. This continuing shortage will put pressure on rents, the top rent in the city centre at the end of 2018 is £33.50/sq ft and we expect prime Grade A city centre office rents to have reached £35/sq ft by early 2019.”
David Feeney, Associate in Cushman & Wakefield’s Student Accommodation Advisory team commented: “Cushman & Wakefield sees 2019 as being another year of significant activity in the student residential sector, with the forthcoming year likely to see another record number of new bed spaces brought to the market. The year is likely to see further division of universities into ‘winners’ and ‘losers’ as students look to be placed at providers with good reputations and records of employability.
“Just as the market is divided in terms of demand, we expect to see further division in terms of supply in the market, with location, amenity spaces and even branding now key to the success of schemes across the UK – especially in the most competitive locations. There is also likely to be increased partnership between universities and the private sector, through both on-campus partnerships transactions and nomination agreements and leases, as private providers look to shield themselves from competition in competitive markets.
“Cushman & Wakefield expects to see increased pressure on the market to deliver more affordable products, with little evidence of reductions in average prices evident overall in 2018. It remains to be seen whether lower prices will be driven through product innovation or increased competition in the sector.”