To sustain its urban renaissance, Manchester must make tough choices on property

The Manchester skyline. Image: Michael Colvin/Flickr/creative commons.

The announcement from Manchester earlier this year that the city council would grant approval to St Michael’s development, a 30 storey tall building in the heart of the city, has sparked controversy across the city.

Those in favour of the project emphasise the positive economic impact of the building, which will include flats, grade A offices, retail space and a hotel, in an area of the city that the council has long been keen to regenerate. Those against it are particularly concerned about the location and aesthetics of the new tower block, especially due to its proximity to historic Victorian buildings.

This story reflects wider concerns about the redevelopment of the city centre, for example about the lack of affordable homesheritage buildings at risk of being lost, and distinctive areas such as the Northern Quarter losing their spirit.

It’s true that Manchester city centre is undergoing massive economic and social changes. As the Centre for Cities' recent City Space Race report shows, between 1998 and 2015 the number of jobs located in the city centre increased by 84 per cent; and the number of residents grew by a whopping 149 per cent between 2002 and 2015.

But notwithstanding the concerns of people who aren’t comfortable with the transformation of the city centre, these changes show how much Manchester city centre has improved as a place to live and a place to work. In terms of employment and businesses, it has been particularly attractive to knowledge-intensive activities, which accounted for half of the new jobs created in the city centre between 1998 and 2015 and represented 44 per cent of all city centre jobs in 2015. This economic success, in turn, has made the city centre a more attractive place to live, with young professionals accounting for a large part of the overall increase in city centre population.


To date, the city centre has been able to accommodate both types of growth because of the amount of land available. But the recent controversies suggest that land availability may now be becoming a restriction. And this poses an interesting challenge for the city’s planners, who need to strike the right balance between commercial and residential use.

Just as Manchester’s urban renaissance has been fuelled by the growth of knowledge-intensive jobs in its city centre, so much of its future success is likely to hang on the continued ability for the city centre to support their growth in the future. This will mean that the ongoing availability of appropriate commercial space will be very important.

Yet national planning policies tend to favour the development of residential space over commercial, as shown in our report City Space Race. Permitted development rights (PDR) are a good example of this. Under this policy, converting office blocks into residential units does not require a planning permission, meaning that local authorities have less power to balance building uses.

Manchester has obtained an exemption on PDR over parts of its city centre, which has helped to protect its office stock. But as shown on the map below, many conversions under PDR have happened – or are currently underway – at the fringes of the protected area, bringing a total of 718 new residential units, which suggests that competition for space is building up.

Source: Manchester city council.

This policy is likely to result in an ad hoc approach to city centre development. The task for planners will be to balance and manage the competing needs of employment space, residential space, heritage and cultural amenities, which PDR makes more difficult.

The city centre cannot absorb all the growing demand; given the importance to the city’s economy of supporting businesses to thrive in the city centre, planners will need to make adequate space available for residential property in other areas of the city.

So while land pressure is not currently as acute in Manchester city centre as it can be elsewhere in the country, current economic changes suggest that this is likely to soon become a significant issue. This will require action today to allow the city centre to continue to play a central role in the city’s growing economy tomorrow.

Hugo Bessis is a researcher for the Centre for Cities, on whose blog this article originally appeared.

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To boost the high street, cities should invest in offices

Offices in Northampton. Image: Getty.

Access to cheap borrowing has encouraged local authorities to proactively invest in commercial property. These assets can be a valuable tool for cities looking to improve the built environment they offer businesses and residents.

Councils are estimated to have spent £3.8bn on property between 2013 and 2017, funded through the government’s Public Works Loan Board (PWLB) at very low interest rates. Offices accounted for half of this investment, and roughly a third (£1.2bn) has been spent on retail properties. And local authorities were the biggest investor group for UK shopping centres in the first quarter of 2018.

Why are cities investing? There are two major motivations.

First, at a time when cuts are squeezing council revenue budgets, property investments can provide a long-term revenue stream to keep quality public services up and running. Second, ownership of buildings in areas marked for redevelopment allows councils to assemble land more easily and gives them more influence over the changes taking place, allowing them to make sure the space evolves to meet their objectives.

But how exactly can cities turn property ownership into successful place-making? How should they adapt the buildings they invest in to improve the performance of the economies?

Cities need workers

When developing the city’s property offer, the aim should be to get jobs back into the city centre while reducing the dominance of retail space. For councils who have invested in existing retail space and shopping centres, in particular, the temptation may be to try and retain their existing use, with new retail strategies designed to reduce vacancies.

But as the Centre for Cities’ recent Building Blocks report illustrates, the evidence points to this being a dead-end. Instead, cities may need to convert the properties they own so they house a more diverse group of businesses.

Many city centres already have a lot of retail – and this has not offered significant economic benefit. Almost half (43 per cent) of city centre space in the weakest city economies is taken up by shops, while retail only accounts for 18 per cent of space in strong city centre economies. And many of these shops lie empty: in weaker city centres vacancy rates of high-street services (retail, food and leisure) are on average 16 per cent, compared with 9 per cent in stronger city economies. In Newport, nearly a quarter of these premises are empty, as the map below shows.

The big issue in these city centres is the lack of office jobs – which are an important contributor to footfall for retailers. This means that, in order to improve the fortunes of the high street, policy will need to tackle the barriers that deter those businesses from moving to their city centres.

One of these barriers is the quality of office space. In a number of struggling city centres, the quality of office space on offer is poor. But the low returns available for private investors mean that some form of public sector involvement will be required.


Ownership of buildings gives cities the opportunity to reshape the type of commercial space on offer. Some of this will involve improving the existing office stock available, some will involve converting retail to office, and some of will require demolishing part of the space without replacing it, in the short term at least. Without ownership of the land and buildings on it, this task becomes very difficult to do but will be a fundamental part of turning the fortunes of a city centre around.

Cheap borrowing has provided a way not only for local authorities to generate an income stream through property investment. but also opens up the opportunity to have greater control over the development of their city centres. For those choosing to invest, the focus must be on using ownership to make the city centre a more attractive place for all businesses to invest, rather than hoping to revive retail alone.

Rebecca McDonald is an analyst at the Centre for Cities, on whose blog this article first appeared.