Manchester Investment Guide CSIPROP2019

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INVESTING INTELLIGENTLY TOWARDS 2019/2020

CSIPROP INVESTMENT GUIDE

MANCHESTER


Manchester Growth in the UK’s most liveable city has been rapid. In the last 10 years alone, Manchester charted an impressive 50% growth, thanks to huge investments that have gone into the city as part of the British government’s Northern Powerhouse push. Jobs and population are on the rise, driving demand for housing and, consequently, causing prices to skyrocket. Manchester is a city to watch as all indicators point to it becoming the shining beacon of Northern England.

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Manchester Key Economic Indicators UK

4.2%

Population ONS & Nomis

2,768,800

Unemployment Rate ONS & Nomis

3.3% Average House Price Growth Hometrack

4.5% 6.6%

Manchester is a remarkable city. From a humble manorial township, Manchester exploded into the limelight during the Industrial Revolution to become the world’s first industrialised city. It is currently the fastest-growing city and one of the most interconnected regions in the UK — with the completion of the HS2, travel time between Manchester and London will be reduced from 2 hours to just over an hour. Today, Manchester is among the world’s top 10 cities for foreign direct investment and one of Europe’s most dynamic and exciting places in which to live and work. It is regarded as the UK’s second city and one of Europe’s largest and most important tech hubs with an economic output (GVA) of £16.1bn of the 6 UK cities within the Northern Powerhouse. Ernst & Young predicts an

Manchester

Research Report: Manchester

66m

Greater Manchester

London

annual GVA increase of 2.4% by 2020, while JLL forecasts an expansion of an average of 2.7% p.a. between now and 2022.

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Manchester Leads in GVA growth by 2020 2014-17 % GVA Growth (CAGR)

5

2017-20

4 3 2 1

Dundee

Aberdeen

Glasgow

Edinburgh

Perth

Inverness

Stirling

East Anglia

Cardiff

Cambridge

Exeter

Cornwall

Bristol

London

South Coast

Thames Valley

Reading

Southampton

Luton

Milton Keynes

Oxford

Portsmouth

Manchester

Birmingham

Sheffield

Liverpool

Hull

Leeds

Newcastle

Teeside

-1

Sunderland

Research Report: Manchester

0

Manchester has consistently shown some of the highest GVA growth rates among the UK cities. Between now and 2020, EY predicts that Manchester will see an annual GVA increase of 2.4% while JLL forecasts a GVA growth of 2.7% p.a. by 2022. Source: EY UK Regional Economic Forecast, 2017/18

High Graduate Retention Typically, the rate of graduate retention varies hugely from region to region in the UK. Data shows that in the academic year ending as recent as 2015-16 , the Northwest and London have come up tops with a retention rate of 66%. The retention rate of postgraduate leavers is higher in the Northwest (66%) than in London (65%).

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Graduate retention rate in the Northwest is led by Manchester, which is home to 4 leading universities, contributing to a student population of approximately 100,000. About 51% of Manchester’s graduates choose to remain in the city for work — second only to London in the UK. With such an active student market, city living has gained strong momentum in Manchester.


UK Cities Graduate Retention Rates, 2013/14 - 2014/15 London Manchester Belfast Birmingham Glasgow Aberdeen Edinburgh Middlesbrough

Swansea Bradford Liverpool Sheffield Bristol Stoke 0

20

40

60

Retention rate (%)

80

Research Report: Manchester

Newcastle

According to the most recent data by Centre for Cities (released Jan 2017), Manchester boasts an impressive graduate retention rate, second only to London. Source: Centre for Cities.

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Vibrant Talent Pool

Research Report: Manchester

Manchester has earned a reputation as the hotbed of tech and startup talent in the UK. Its vibrant talent pool, coupled with world-class transport links has made it one of the best cities in Europe to do business in. It is now seen as the regional centre for finance, commercial and retail, with major corporations the likes of the Co-operative Group, Amazon, Royal Bank of Scotland, as well as BBC and ITV setting up key operations within the city. Between 2010 and 2015, Manchester and Salford jointly created some 14,000 jobs in a variety of sectors. With the relocation and start-up of major corporations and small businesses, comes the creation of new jobs. In the shorter term, Manchester is expected to witness employment growth averaging 1.3% during 2018 - 2022, four times the regional average. A study by Cushman & Wakefield predicts that around 3,100 new jobs will be created per year to 2034 across Manchester.

Fast-growing Population With job growth and the strength of its higher learning institutions, there's little wonder that Manchester’s population is growing. From 2002 - 2015, Manchester’s city centre had grown 149% from 14,300 to 35,600 people. When measured by a combination of jobs and population increase, Manchester had seen the fastest city centre growth in England and Wales within that period. The city is on track to experience a 14.1% increase in population between 2018 and 2041.

Quick Facts: Manchester . UK’s 2nd city and one of Europe’s largest, most important tech hubs . One of the world’s top 10 cities for foreign direct investment . A 100,000-strong student population & graduate retention rate of 51%

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House Price Inflation, Nov 2017 & 2018 8% %yoy 12 months ago %yoy current

6%

2%

0%

-2%

Aberdeen

Cambridge

London

Oxford

Southampton

Portsmouth

Bournemouth

Belfast

Bristol

Sheffield

Leeds

Glasgow

Newcastle

Cardiff

Leicester

Liverpool

Nottingham

Birmingham

Edinburgh

-6%

Manchester

-4%

Manchester is among only 4 cities in the UK to chart higher house prices than a year before. Source: Hometrack Nov 2018

Research Report: Manchester

% Year on year

4%

Highest House Price & Rental Growth in the UK Manchester is one of the 4 cities in the UK where high competing land values and policy restrictions cause barriers to development. Thus, in spite of strong demand, pipelines of new stock remain low, resulting in increasing property prices. More than any city in the country, landlords in Manchester are getting the best returns on their investment as house prices have been increasing consistently, exceeding the UK average in 5 out of the last 6 years. In the last 12 months to July 2018, prices had risen just under 9% while London saw a drop of 1%. It is among

only 4 cities in the UK where price growth by Nov 2018 was higher than at the same time in 2017. Regeneration in the city and a severe constraint in housing supply will continue to push property prices. This city is one to watch as residential prices are forecast to grow at an average of 4.2% annually over the next 5 years compared with the 2.4% across the UK.

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Manchester House Price & Rental Growth, 2018 - 2022

22.80%

House Price Growth Forecast % p.a Rental Growth Forecast % p.a

*

17.60%

Cumulative

6.50%

House Price & Rental Growth Forecast % p.a

Research Report: Manchester

6

4

4% 3.50%

3.50% 3%

3.50% 3.50%

3.50% 3.50%

3%

2

0

2018

2019

2020

2021

2022

2018-2022*

Manchester is forecasted to show consistent house price growth over the next 5 years, increasing at an average of 4.2% annually compared with 2.4% across the UK. Source: JLL

The cost of renting in Manchester, meanwhile, has gone up by a staggering 30% in the last 4 years. In the 12 months to Sept 2018 alone, rent in Manchester had gone up by 7%, driving among some of the highest rental returns in the UK. A recent survey shows average rental yield of as high as 7% in some areas of the city.

Quick Facts: Manchester . Expected employment growth averaging 1.3% for 2018 - 2022, 4 times regional average . Forecasted 14.1% increase in population between 2018 and 2041 . Residential prices forecasted to grow at a cumulative 22.8% (2018 - 2022)

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Words VIVIENNE PAL

Research VIRATA THAIVASIGAMONY VIVIENNE PAL IAN CHOONG

Design & Layout AHMAD MUNAWAR ABD RAHIM JANE TAN

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PROJECT MANAGER CSI PROP Pte Ltd @ 2019 CSI PROP Pte Ltd. First Edition. All rights reserved. This publication is the sole property of CSI PROP Pte Ltd (trademark: CSI PROP) and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of CSI PROP Pte Ltd. All descriptions and other particulars are given in good faith and are believed to be correct but any intending readers, purchasers or tenants should not rely on them as statements or representations of fact and must satisfy themselves by inspection or otherwise as to the correctness of each of them. The Marketing Agents and The Project Manager shall be held responsible for any negligence, consequential loss or damage arising from the use of this information. No person in the employment of the Marketing Agents and the Project Manager has any authority to make or give any representation or warranty whatever in relation to these investments and properties. This is an overseas investment. As overseas investments carry additional, financial, regulatory and legal risks, investors are advised to do the necessary checks as well as research on the investment beforehand. Investors are also advised to seek independent and qualified legal, financial and tax advisors. Past performance is not necessarily indicative of future performance even if the same strategies are adopted.