Manchester, U.K.

The World's Property Hot Spot

Investing in Manchester? Really?

This is probably the first question that many would ask. When it comes to buying properties overseas, most people would prefer to go for those in the capital city, such as London, Sydney or Singapore.

It is understandable that when one ventures into an unknown space, human instinct would cling on to places that they are familiar with, or at least, see or hear most about.

"Opportunities are everywhere if you know where to look"

Manchester in itself is a strong brand known globally. Famed for its champion football club namely Manchester United F.C. and Manchester City F.C., hundreds of thousands of football fans flock to the city to catch a match of their favorite team. In fact, Manchester is more than just a football city. It combines industrial, corporate, education and tourism all in one city.

In this first part of a series on Investing Overseas, Property Hunter brings you on a journey to explore what are the real estate investment opportunities beyond the soil of Malaysia. Maybe by the end of this interactive article, your response to the opening question will be "Manchester? Why not?"

Manchester At A Glance

1st industrial city in the world

2nd largest economy outside of London.

3rd most visited city in the U.K. (after London & Edinburgh)

Manchester has a population of 2.8 million

It also has the largest student population as compared to any other cities in Europe

The Manchester Airport is the largest and busiest airport in U.K. outside of London

Location of Manchester

Strong Population

Manchester has experienced a 20% population growth over the past 10 years, and it is forecasted that the city will undergo another strong growth of 20% in the next 10 years. Manchester City Council residential growth prospectus calculated that

"An additional 55,000 more properties across the city will be required by year 2027"

However, only 3,700 homes are being built each year.

Manchester ranked No.1 in population growth

Manchester ranked No.1 in population growth

Properties in Manchester

In a recent report published by The Telegraph, the strong demand for city-centre living, a huge student population and urban regeneration initiatives make Manchester one of the best-performing property markets in Britain

International real estate agency JLL rates Manchester as its No 1 prospect for residential price growth over the next five years, with annual average growth of 4.5% compared with 2.4% across the UK. Rents are expected to increase by around 3.5% per annum between now and 2020.

“City living has gained strong momentum in Manchester over the past three years and, together with an active student market, has pushed demand in both the sales and lettings markets noticeably higher”
Neil Chegwidden, of JLL residential research.

According to property portal Zoopla and Rightmove, the average property price in Manchester ranges between £184,860 to £192,547. Most of the sales in Manchester over the past year were flats (apartments) which on average sold for £173,284.

Source: Zoopla

House price capital growth from 2013 - 2018

House price capital growth from 2013 - 2018

Despite the growth in values, Manchester remains an attractive proposition to investors with increasingly strong rental yields. The young demographic is fast becoming the driving force in the number of rental properties in Manchester – which constitute two-third of the city centre’s housing stock.

Average Property Rental in Manchester

Average Property Rental in Manchester

With various government initiatives forming a strong catalyst for growth, coupled with a fast growing demand and young population, the outlook for Manchester remains highly positive.

Source: JLL UK Residential Research | February 2018

Source: JLL UK Residential Research | February 2018

Business & Employment

The business scene in Manchester is vibrant. This is evident through the presence of multinational corporation offices in ths city.

"80 out of 100 FTSE companies have their offices set up in Manchester"

Greater Manchester

Mega Developments

Greater Manchester is a metropolitan county that spans over 1,277KM2 and comprises of 10 metropolitan boroughs. The government's commitment to develop the metropolis is evident in the establishment of Greater Manchester Combined Authority (GMCA).

The birthplace of the industrial revolution, Manchester is now one of the most vibrant and cosmopolitan cities in the UK, yet it retains its own unique character.

Source: Manchester Convention Bureau

There are a stable of sizable developments in Manchester which aim to stimulate the Greater Manchester economy. These projects include upgrades in infrastructure, logistic, township, commerce and schools.

Airport City Manchester

Airport City Manchester is a large scale integrated development which is located directly adjacent to the Manchester Airport. The development consists of 5 million sqft of offices, logistics, hotels and advanced manufacturing space which will be built over the next 10-15 years, with a total development value of £1 billion.

Source: http://www.airportcity.co.uk/

Source: http://www.airportcity.co.uk/

To date, Airport City Manchester has successfully attracted the single largest investment from China's Beijing Construction Engineering Group International, who is also the joint venture partner to deliver the project.

On 24th April 2018, Airport City announces deals to deliver Holiday Inn and Ibis Budget hotel, marking the creation of a new hotel district.

Worth noting is that Manchester Airport, which is the second busiest airport after London's Heathrow Airport, provides flights to around 225 destinations around the world.

High Speed Rail 2

High Speed Two (HS2) is the new railway that will be the backbone of Britain’s transport network. By making it faster and easier to travel for work and leisure between the north and south, HS2 will increase trade, boost tourism and regenerate towns and cities.

"The new HS2 high speed line will provide fast, frequent and reliable connections between 8 out of Britain’s 10 largest cities and their regions: Birmingham, London, Leeds, Manchester, Liverpool, Sheffield, Edinburgh and Glasgow."
https://www.hs2.org.uk/where/

Source: BBC.com

Source: BBC.com

The new railway significantly reduces the travel time between Manchester other parts of England by upto 50%. Once the second phase is complete, Manchester-London journey would take 1hr 8min (down from 2hr 8min).

The Northern Powerhouse

The Northern Powerhouse is an ambition of the U.K. government to bring together the great cities, towns and rural communities of the North of England and Wales to become a powerhouse for the economy.

The government will invest in transport infrastructure to improve connections between and within the North’s towns, cities and counties; work with local areas to raise education and skills levels across the North; ensure the North is an excellent place to start and grow a business; and ensure the Northern Powerhouse is recognised worldwide as an excellent opportunity for trade and investment.

Source: Ministry of Housing, Communities and Local Government

Manchester, strategically located in the midst of the movement is set to become one of the greatest beneficiaries through the development of transportation network, education hubs, technology incubators and business initiatives.

Manchester in the news