Cushman & Wakefield has presented its North West Property Outlook for 2018 and beyond. The breakfast presentation, held at the Lowry Hotel in Manchester, revealed that the commercial property market in the North West saw a 46% increase in investment activity to over £4 billion in 2017.
John Keyes, International Partner and Head of Public Sector Advisory at Cushman & Wakefield was joined by Darren Yates, Head of Retail Research & Insight, Sophy Moffat, Associate in Research & Insight and Bruce Poizer, Head of Investment at Cushman & Wakefield in Manchester to discuss market conditions and the opportunities and threats that lie ahead. Finally, Caroline Baker, the new Head of Cushman & Wakefield’s Manchester office gave an update on the Residential market.
Darren Yates began the event with a presentation which set the scene and discussed key trends in the commercial property market across the main sectors.
Economic and political uncertainty over the last year have made business planning extremely difficult, particularly for sectors like banking, the car industry and agriculture. However, last year also saw the second highest volume on record for commercial property investment with around £60billion worth of deals, driven largely by the industrial sector.
Darren Yates said: “We are seeing a longer term trend which is the growth in industrial, leisure, alternatives and mixed-use, largely at the expense of retail. We’re also seeing an increasing shift towards mixed-use and a blurring of the traditional sectors.
“A more recent trend has been the slowdown in the shopping centre investment market, which reflects investor concerns around the structural changes going on in retail, particularly the secondary market.”
Sophy Moffat provided an insight into the importance of wellbeing in the workplace.
Her presentation revealed that a combination of robotics, big data and automation will inevitably change our working environments and, although offices of the future will be very different, they will be more human, not less.
“Although technological disruptions will automate certain jobs, occupations drawing on cognitive abilities, social skills and specialist knowledge, which machines cannot easily replicate, will be even more important. Only smart office spaces, purposefully designed to enhance wellbeing, will create a best in class user experience for the flexible, consumer-minded Knowledge worker of the future.
“Right now, most workers are unhappy; 76% report they are struggling with wellbeing, and research studies estimate the cost of work-related stress to be as high as US$650 billion in Europe. These numbers can’t be ignored much longer. ‘Smart’ buildings will tell us more about the impact of the workplace on human beings than we have ever known. As workers and employers grow wise to their environments, buildings that are not ‘well’ ultimately risk heightened vacancy levels, prolonged void periods and loss of income potential.
She added: “The message to the real estate and built environment sector is clear: prioritise wellbeing and make spaces human again.”
Bruce Poizer provided an overview of the commercial markets in the region which has seen some very high profile investment transactions with an increasing number of foreign investors. The Manchester city centre office market has consistently outperformed all other regional centres over the last 10 years and continues to offset a number of high profile occupiers. He predicted that a number of current active requirements will “kick off” new developments in the next 12 months.
He said: “The industrial and logistics sectors will continue to see more development activity particularly in the small and box sizes where new development is becoming more viable. Despite post-Brexit concerns manufacturing was the most active sector although e-commerce will remain one of the main activities of demand.”
Bruce also showcased new Cushman & Wakefield research focusing on the resilience of the North West’s high streets and acknowledged that significant falls in both rents and capital values presented an opportunity for developers and Local Authorities seeing to re-invent their town centres.
Finally, Caroline Baker, the new Head of Cushman & Wakefield’s Manchester office provided an overview of the residential market in the North West. She added: “It’s great to yet again welcome our clients and guests to our annual insight event. We hope the speakers provided them with advice to ensure they respond to current and future trends. We are pleased to be able to share positive messages about how well placed Manchester and the North West property market are. However we cannot be complacent and we need to continue to innovate to overcome constraints in some areas. We strongly believe that the region’s public private partnerships are well placed to respond to the challenge and we look forward to working with many of them in the coming year.”