How is Manchester generating inward investment in jobs and business?
The growth agenda
While culture provides the colour and homes the backbone, the talent pool is the heart that pumps the lifeblood of the economy through Manchester’s streets and into its suburbs. Manchester’s economy is expected to grow the third fastest in the UK in the next three years, with annual GVA 2.5% growth and £2bn more by 2027. This is on the back of growth in science, tech, professional and financial services, with anticipated jobs growth of 2% per annum. The jobs market and the kinds of industries that attract talent and inward investment extends far beyond occupiers of Grade A offices – and yet the professional and financial services that support other sectors continues to drive city centre office demand, with the growth of one intrinsically linked with growth of the other.
Manchester was the Northern Powerhouse long before the Coalition government reinvented the expression. Its businesses excel when it comes to attracting investment. Manchester has the most foreign investment after London and has twice the venture capital (VC) injection per capita than average for the UK. There are few signs of muted consumer or business confidence when walking through the city – five years on from Covid and the city centre is once again a thriving, busy space. Its footfall will soon exceed 2019 on the back of the growing urban population and workforce.
Manchester has a long history of imaginative thinking and entrepreneurialism. From pioneering ideologies around socialism, feminism and vegetarianism, to technological innovation from textiles to graphene, computing to AI, nuclear physics to robotics, designing art to designing food. Manchester’s symbolic bee represents the ‘hive mind’: a melting pot of ideas, hard work and opportunity.
The innovation ecosystem
Research and innovation are increasingly making Manchester a viable alternative to the London, Oxford and Cambridge triangle. The city is now home to over 10,000 tech companies and boasts a digital tech turnover of £5 billion. There has been a 77% increase in space occupied by technology movers (TMT) since 2021 and over 380,000 sq ft of R&D space was delivered in Greater Manchester during the last 18 months. The prime driver for this growth is in forging links between a dominant university presence, technological innovators, hungry investors and the ever-present entrepreneurial mindset of those to whom Manchester is their adopted home.
Over 30,000 graduates end up in Manchester after their studies each year, with student retention an impressive 50%, and those heading here after graduating exceed those who leave. So why the influx? Strong city identity, culture and good places to live are only part of the picture. Job prospects are key, but this isn’t just about corporate roles either, it’s the myriad of different industry ecosystems that bring different talent pools together – creative industries, technology, science, innovation, gaming, food and so on. With 50% of students in Manchester studying STEM subjects, the link between science and innovation roles is a clear driver of this demand.
Furthermore, 300,000 sq ft of new floorspace at Manchester Met in 2024 and the College Site at Boddingtons for 2025 shows further enhancement of the education sector, with 200,000 sq ft of additional education space in the city centre expected this year. And there are offshoot benefits to the retail and leisure market as 850 students soon to be studying in City Tower will boost demand for amenity/F&B provision. New campuses are expected to open up wider development opportunities.
Yet it is the spaces that bring businesses and university knowledge together that provide the most exciting growth opportunities and investment. Oxford Road Corridor, Biobank, Manchester Science Park, Institute of Advanced Materials, and the 2024 launch of Sister – all have specialist research hubs, and chiefly link academia and industry. Innovation-led developments, like Bruntwood’s SciTech, create innovation districts that nurture start-ups, help them scale up and eventually allow them to spin out, with the potential to attract eye-watering levels of VC investment. There are a number of local and national government funds and strategies to support this important area, including the Greater Manchester Innovation Accelerator with £100m in R&D projects. Manchester’s Economic Strategy prioritises innovation and sectors that Manchester already excels in, such as AI and fintech. Innovation Greater Manchester (IGM) has £160m of funds, with the task of helping create £3.8bn of economic benefit and 100,000 R&D-related roles.
Government-backed
While geopolitical, economic uncertainty and subdued business confidence remain a sticking point for UK commercial real estate, confidence for the long term has been resilient in Manchester despite these headwinds. Commercial development viability has been the main stumbling block, but should become easier as the market recovers and will be boosted by government funding. We have long witnessed the advantages Manchester plays to from a devolved, proactive and innovative local government, in consistently proving adept at attracting public and private funding for economic development.
In January, Whitehall agreed to a £630m consolidated pot of cash to be given to Andy Burnham as a lump sum in 2025, part of long-awaited Levelling Up funding. A week earlier, Greater Manchester announced £10bn in pipeline projects and a ten-year growth plan for six generation areas, including:
- North Eastern corridor (also known as Atom Valley) – 1.6m sq ft of scientific R&D space
- Western Gateway (including Old Trafford Regeneration scheme) – £7bn GVA to benefit and effectively double the footprint of Salford Quays
- Central Growth Cluster (the extended City Centre) – 90,000 new jobs / 75,000 homes
- Southern Growth corridor (Manchester Airport / Wythenshawe and Stockport town centres)
- Several of these are not newly announced proposals, but it does provide confidence that large-scale initiatives are being brought into action.
Manchester has never been one to hold back on ambition, and while this is likely to take a lot longer than ten years to achieve, they’re all the right signals for the real estate industry. The City already has a great partnership between the public and private sectors, but further injection of capital is needed to get things moving at pace, particularly those that are social, infrastructure or viability sensitive.
Key infrastructure projects are supporting growth in investment and jobs via a series of funding mechanisms. Metrolink’s current round of funding amounts to £150m, with planned extensions to create the biggest tram network in Europe, providing additional commuting capacity, but also enhancing the appeal and investment into satellite towns. The £4bn Victoria North development has secured funding from central government to support the case for a Metrolink stop in the heart of the scheme.
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Is there enough space?
All of this may seem overwhelmingly positive, but there remains a gap within the real estate industry between what is needed and what is currently being delivered. There are plentiful workspace growth opportunities – all of these businesses will require places to locate, either through new development or the repurposing of tired and unsuitable accommodation. We need to constantly think about providing the depth of supply to the market required by a broad ecosystem. As Manchester’s property market evolves, it presents a mix of challenges and opportunities. Navigating these waters requires boldness, strategic investments, and a keen eye for emerging trends. With the right approach, investors and developers can capitalise on Manchester’s vibrant property landscape for long-term success.