POWER changers
As the commercial property markets settles into a steady - rather than buoyant – phase, the shape of the Manchester-focused Northern Powerhouse is broadening and changing.
With a new minister in charge, John Berry, the powerhouse concept takes a broader sweep to include smaller towns in the north in a shift away from the concentration on the major cities such as Manchester, Liverpool and Leeds.
Berry said: “Northern Powerhouse 2 has to be about more than our great cities, it has to be a whole north approach. Until now Greater Manchester has been the major recipient of government funding for social and infrastructure projects, such as an arts centre and two research institutes”.
The policy brought results with an 84% rise in jobs in Manchester between 1998 and 2015, said the Centre for Cities, even exceeding the figures for London. Berry makes the point that Manchester has been sucking in labour and investment from other towns in Lancashire.
“People living in those areas, they also have their own ambitions for economic expansion”.
As someone who has grown up in the north (he was a lawyer in Liverpool) Berry has a personal interest in the success of the policy.
This will be judged by overcoming some of the problems for the north, notably rail transport, where a faster line over the Pennines is so vital. Apart from anything else, there is a political dimension for a Conservative government needing to win more parliamentary seats.
As far as the Manchester office market is concerned, Mark Canning of Canning O’Neill, said it is “steady but less bullish than last year.
Nevertheless, the national profile of the city is still high”.
While he believes the conversion of offices to residential use has helped the market, it is now in danger of going too far and bringing a shortage of space.
Another future problem, he suggests, is the amount of office space being gobbled up by the new service companies like We Work and he questions the financial sustainability when the rent free periods end on the basis of the prices being paid.
“One really strong market is Warrington”, Canning said, “and in particular Birchwood Park is having a good year”.
Optimism is also reinforced by a survey by the Federation of Small Businesses (FSB) which reported an improvement in confidence among small firms in the North West, even though it remains in negative territory. More than a quarter of the small firms in the region expect their performance will either improve or remain the same but over half said their revenues are stable or increasing.
Simon Edmondson of the North West region of the FSB commented: “It is pleasing to see business confidence returning to the region, and elsewhere across the country. I suspect we are in for a bit of a roller coaster and as such, economic sentiment will wax and wane like this probably until well past Brexit itself”.