Two cities have been identified as the UK’s highest-growth cities across multiple property sectors over the next 10 years, according to new research by global real estate advisor CBRE.
The firm’s ‘Which City? Which Sector?’ report found that Bristol and Manchester were ranked consistently highly for the major commercial real estate sectors – office, retail, urban logistics, and multifamily.
The report examined 12 real estate sectors across the 50 largest regional towns and cities in the UK outside of London. The firm analysed economic drivers such as GDP, employment and income growth, demographic trends, and property market data, including supply pipeline, local universities, and housing affordability.
Manchester is supported by its diverse industry base, thriving retail, tourism and hospitality sectors, and boasts one of Europe’s largest student populations. It is ranked in the top five for growth in the following sectors: office, retail, urban logistics, student accommodation, multi-family housing, single family housing, affordable housing, senior living, leisure and food and beverage, self storage and life sciences.
Bristol, meanwhile, is expecting 3.6 per cent population growth, 5.6 per cent employment growth and a 13 per cent increase in office employment over the next decade. It is ranked in the top five for potential growth in office, retail, urban logistics, student accommodation, multi-family housing, single family housing, affordable housing, senior living, leisure and food and beverage, and self storage.
A number of other cities and towns fared strongly across multiple sectors.
Brighton ranked in the top 10 of more than half the sectors, reflecting its strong expected employment and disposable income growth. Leeds ranked particularly well in office and retail.
In Scotland, Edinburgh and Glasgow were ranked in the top five for major sectors – student accommodation, offices, and hotels. In the life sciences sector, Edinburgh is the fourth city for highest expected growth, and Glasgow sixth.
Manchester, Birmingham, Bristol, Edinburgh, and Glasgow have been tipped as the leading growth markets for the office sector. Manchester, Birmingham and Bristol have the highest forecast growth in office-based employment whilst Birmingham and Edinburgh are driven by highly educated talent, with Liverpool and Southampton expected to see significant growth in this area.
Jennet Siebrits, head of UK Research, says: “Future growth locations for office real estate is largely determined by demand metrics such as GDP growth, working age population, access to highly skilled workers and forecast office-based employment. All these fundamentals could impact office demand and subsequent size of the occupier footprint in the next decade.”
Given that e-commerce and online shopping is the major driver of demand for urban logistics space, locations with a high online penetration percentage, access to high-speed internet, and a forecasted growth in population of age groups with a high propensity to spend online, ranked the highest.
Beyond the traditional sectors, life sciences is expected to experience substantial growth outside of the Golden Triangle locations of Cambridge, London and Oxford, according to the research findings. Whilst Cambridge and Oxford are ranked first and second in the report, and both cities’ future growth trajectories remain strong, Manchester (ranked third), is due to bring circa two million square foot of lab space to market by the end of the decade and CBRE says Edinburgh and Birmingham are also markets to watch.
The living sector has experienced rapid growth in the past decade, and this is expected to continue, with supply and demand balances, relative rental affordability and population growth being key drivers. Manchester, Bristol and Birmingham are all ranked in the top five cities for potential growth for multi-family housing, single family housing, student accommodation, affordable housing and senior living.