Driving cross sector property development through leisure
Second coming
Manchester’s culture has a strong foundation in entertainment on an international stage. The 1980s and 1990s created several global stars from the world of music and sports; local heroes who reinvested their wealth into bars, clubs and restaurants, and proved pivotal in reforming the city’s nightlife and profile. Its urban practitioners, meanwhile, began to realise that bringing the city out of its post-industrial malaise needed a more progressive and interventionist approach to development and that its culture and people were central to boosting regeneration opportunities.
The City’s leaders proved adept in their ability to attract and secure funding from both public and private sources. This began with cultural venues, like The Bridgewater Hall, following which the council secured £38m of the £52m cost to build Manchester Arena from national and European funding. The arena is estimated to have brought £3bn in spend to the city in its first 20 years of operation and was a powerful demonstration that Manchester was open for business. The Stone Roses’ 1989 classic “I Am the Resurrection” was becoming a fitting metaphor for Manchester’s new industrial revolution.
Fast forward to the 2020s and the likes of Freight Island, New Century, Aviva Studios/Factory International, and Co-op Arena are evidence that the city’s investors are recognising the importance of Manchester’s national and international presence as a cultural trailblazer. Furthermore, these schemes are a beacon to the brand and identity of the wider developments in which they sit (Mayfield, NOMA and St John’s), in a city where brand and identity are everything. The Manchester Bee is everywhere you look, from century-old architecture to its modern street art and furniture, and even its transport system – synonymous with a busy, enterprising and independent community. Manchester’s ethos is still humble to its roots, but has more swagger than its peers.
Brandchester
Sports branding has played a central role in bigging up the city’s stature. A failed bid for the 2000 Olympics provided the infrastructure needed to secure the 2002 Commonwealth Games. Its velodrome the home for British Cycling, and kicking off two decades of world domination in the sport and the careers of superstars for Team Sky/INEOS. All good profile for Manchester, which in 2024 became the first European Capital of Cycling, with 1,800 miles of additional cycling routes to be delivered in ten years as part of the city’s zero carbon ambitions. The legacy of the investment in the sport still has a positive influence on the city’s status and infrastructure two decades after the Commonwealth Games medals were distributed.
Perhaps of more significant impact was the purchase of Manchester City FC in 2008, pivotal to kicking off the regeneration of Eastlands and Ancoats in a major public/private partnership between Manchester City Council and Acre Real Estate (formerly ADUG). Whichever side of the red and blue line you sit on, the combined force of Manchester’s premier football teams rivals that of Milan, Madrid and Munich on the world stage. The scale of urban development from Manchester Life and the success of its football teams really put the city on the map for international investors and visitors alike, as well as driving occupational demand from people who want to benefit from living close to the action. Next stop, Old Trafford, where the regeneration of United’s ground and surrounding area has just received local and national government backing. It could deliver 17,000 homes and 90,000 jobs, effectively doubling the land area of Salford Quays.
The world’s stage
This inward trajectory of culture, money and notoriety has grown tourism and demand for city centre living. The population increased by 80,000 in the quarter century that divides United’s footballers bringing home the European Cup & Treble in 1999 and City doing the same in 2023. A further 15,000 homes are projected before the middle of the next decade – mostly within a stone’s throw of Victoria Station. Manchester has become a city of neighbourhoods. The New York Times named Ancoats one of the top 12 global destinations to visit in 2024. The success of Ancoats is not only the 1,500 homes delivered by Manchester Life, or the workspace in Urban Splash’s Beehive Mill – it’s in the public realm, amenities, bars and restaurants that have retained a distinctly independent feel that extends the Northern Quarter into what Time Out describes as one of the world’s coolest communities.
The visitor economy is worth £7.5bn per year and continues to further feed growth in cultural development and events: 2023 saw Arts funding in Greater Manchester reach £13m; ENO will relocate to Manchester by 2029; Aviva Studios’ live entertainment market has the potential to accommodate an extra 2.05m visitors per annum by 2032; Chanel’s event in 2023 had an estimated GVA of £100m for the city from its international profile.
Manchester’s global reach and world-class universities are driving demand from both domestic and international students (Manchester is the 25th best student university in the world), with the student population exceeding 110,000 – of which one-sixth are non-doms. Wealthy international students have helped to drive up the cost of city centre living and demand within the BTR and PBSH sectors, but they also bring with them considerable purchasing power and support a higher quality of retail and leisure offer, particularly in the F&B market. The thriving Asian food scene is a clear benefit, and one that serves the wider population.
Growing independents & independence
In fact, circling back to where all this began, with drinking venues in the 80s and 90s and restaurants in the 00s and 10s, Manchester’s F&B market has never looked so strong. Provision doubled in the ten years to 2025, with a further 700,000 sq ft designated to this use. More than 200,000 sq ft of retail and leisure space completed in the last two years, representing a 12% increase year-on-year and a 52% increase from 2021. Another 381,000 sq ft is currently under construction, of which a significant proportion will be F&B and leisure space.
Not all leisure businesses that open stand the test of time, or they may have a natural shelf life. It is often the alternative brands that gain favour with Mancunian consumers. Many a casual dining brand has upped and left if they are too mainstream. Brands need to have the air of an independent operator, even if they’re not one. And there are plenty of independents taking space, such as The Pollen Club, Bar Shrimp and ATOMECA. This is one reason that the Northern Quarter saw business rates increase on average 16% at the last review, while the city’s mass-market retail areas fell 9%. Business rates reflecting rental change and rental change reflecting consumer demand. Right now, there is more demand for leisure in Manchester than retail, so it’s not surprising that it is becoming a more expensive, competitive trading environment.
London-based and international brands are increasingly looking to follow The Ivy, whose Spinningfields venue is rumoured the best performing in its portfolio. Nobu, Lucky Cat, Sexy Fish, Soho House, Museum of Illusions, and Miami-based Chotto Matte have either recently opened or are pipelined for 2025 and will pay handsome rents in doing so. The St Michael’s development will see the first branded residence outside London and the third in Europe from The W Group. A further seven hotels are under construction, including Mollie’s Motel and Soho House, opening in 2025/26 – a great barometer for the increasing confidence we’re seeing in the market and a nod that overnight stays are also entwined with the entertainment and business economies.
Original [and] modern
Whether culture or consumer are the chicken or egg in driving this growth curve, it certainly feels like the momentum has been reached, where the scale of development in Manchester supports an increasingly cosmopolitan city ethos. Peter Saville’s “original modern” city rebrand in the early naughties reflects Manchester’s historic industrial roots and a socially engaged connected community. Manchester’s mayor, Andy Burnham, has suggested that its music alone is worth £169m a year to the local economy, but this only scratches the surface of the benefit the extended cultural scene has in driving demand in other property sectors from the city centre heartland and into the arteries of its surrounding towns.