FBE's The Agents' Perspective Breakfast
This morning, (Friday 22nd April), I attended a breakfast seminar at Radisson Blu put on by Forum for the Built Environment and sponsored by Caulmert. The topic of the seminar was ”The Agents’ Perspective”’. Speaking at the event were John Cooper of Deloitte, Dan Crossley of WHR, and Dan Davies of Metis. Each speaker provided their own specialist analysis and insight into past and present trends, and predictions on what the future in the development and planning industries might hold. This blog provides a summary of the conversation at this morning’s session.
John Cooper of Deloitte
Referencing their January Crane Study, Deloitte’s Development Director John Cooper explained the significant role of direct foreign investment in not only Manchester’s market, but also the wider Northern Powerhouse context.
His analysis looked at Manchester’s juxtaposition of a 2009 oversupply of commercial properties having been converted to a current undersupply. Businesses in the regional capital are being forced to fight for not just glamorous spaces to meet their requirements, but any space.
Across four emerging schemes alone, Manchester is set to receive a further 1.35 million sq.ft of commercial space in the coming year. And where is this commercial floorspace emerging? Primarily in Ancoats and New Islington as the race for space in Spinningfields and other more established commercial areas approaches near maximum capacity.
Dan Crossley of WHR
In his discussion forum, Dan Crossley explored ‘What the hell is going on?’. Dan Crossley, an Equity Partner of the Investment sector of WHR, examined the three key aspects that comprise the commercial development sector; offices, retail and industry, looking at where new development is being delivered.
His headline statistics were:
- The introduction of a 800,000 sq.ft across six main schemes under construction in Manchester city centre;
- A further 750,000 sq.ft being established through “recycling” buildings; and
- An additional 4.5 million sq.ft in the pipeline.
Crossley explained that he has noted a transition from smaller units being desirable to much larger schemes. A fantastic example of this change is that 10% of the 2015 total commercial floorspace take-up in the area was from Amazon signing up to a warehouse of approximately 260,000 sq.ft at Airport City.
Touching on stats from the Chancellor of the Exchequer, Crossley told his audience that the average commuter distance in London is approximately 40 miles. If that same radius were to be applied in the context of Manchester city centre it would encompass all of the surrounding Greater Manchester authorities (Trafford, Stockport, Tameside etc), Liverpool, Sheffield and Leeds.
There is a 7.2 million strong workforce within an hour commute of Manchester. It is these figures which Crossley mentioned as fuel to his argument that rather than being reliant on one city as a national economic hub (London), the United Kingdom could be much better placed by replicating the German model whereby regional cities and major towns are more balanced in terms of being economic forces.
Like John Cooper had touched on, Dan Crossley discussed how uncertainty surrounding Brexit has played a pivotal role on reduction in commercial floorspace take up in the first quarter of 2016. He did, however, acknowledge a trend that foreign investors have not been deterred by the unpredictability presented by Brexit. His conclusion on 2016 take up was that while there has been a slow start in the first quarter of this financial year, he anticipates that by September the commercial floorspace take up and the money involved through deals will be back on track.
Dan Davies of Metis Real Estate
The third and final speaker of the FBE event was co-founder and Director of Metis Real Estate, Dan Davies. As a self-confessed retail sector ‘keeno’ with a love of all things ‘food and drink’, I found Dan Davies’ discussion a personal highlight as he delved into how the retail and leisure sector has evolved over the past two decades.
Dan Davies examined how the retail sector has grown a level of dependency on leisure influxes such as the ‘casual dining’ market. While people enjoy the convenience and choice presented through online shopping, it does not allow for social interaction. The drive of new leisure concepts, such as those examples mentioned below, is partly to overcome the power of online shopping.
Twenty years ago, leisure was focused on the American concept of out of centre bowling alleys and cinemas, and nightclubs at retail parks. Today, new leisure opportunities include boutique cinemas and bowling alleys such as Dog Bowl and All Star Lanes. These not only provide a visionary approach to a city centre night-time economy but act as yet another draw to Manchester and its evolving retail and leisure scenes.
So why are retail and leisure such buoyant cross-over markets? Dan Davies’ interpretation drew attachments to four factors:
- There being more food and drink choices;
- The fashion of eating out having boomed;
- A perception that despite an influx of programmes such as Masterchef and Great British Bake Off younger generations have less cooking ability than older generations; and
- The role of social media including the Instagramming your plate and tagging where you are.
So what does the future hold? In two words, Davies concluded “no idea!”.
The market has transformed so much with an increase from previously having minimal Use Class A3 (Food and Drink) offer in a city as big as Manchester to now having well over 9,000 restaurants (1 restaurant per 1,576 residents in fact).
In the past year alone, over 60 new restaurants opened in Manchester including 13 in the newly refurbished Corn Exchange – a prime example of a leisure destination which has allowed London eateries to expand to the Manchester market. Single-food menus (such as Chicken Shop and Nandos) and the ‘dirty food’ concept, driven partly by the emphasis on branding, have also entered the food and drink arena. In a blast from the past approach, the concept of street food and markets has also taken off, potentially aided by the success of Altrincham Market.
In his conclusion, Dan Davies reflected upon the diversification of the catering world. Twenty years ago, leisure was an afterthought but now it is a major consideration in the blueprints of projects and without it commercial districts such as Spinningfields would fall flat.
My thanks to the three speakers for their expertise and insight, and of course to FBE Manchester, Caulmert and Radisson Blu. The seminar certainly provided food for thought… and has certainly got me thinking about where to eat in town tonight!
Images sourced from:
- Manchester skyscape by Kevin From Manchester via flickr
- Nandos bottles by Praveen via flickr
- All others, author's own