Corona And The Manchester Burbs: The First Signs Of A New Way To Live And Work

It is increasingly clear that city centres may take a very long time to return to February 2020 levels of activity. Large office employers are signalling that they expect working from home to be a part of most office workers' lives into the immediate future. The latest is Legal & General, which said it expects most of its 7,000 UK employees to spend most of their time at home.

So is there evidence that the suburban economy is adapting? Are office locations in the burbs around Manchester scoring more deals? Are working-from-home professionals demanding improved amenities within walking distance, and how are neighbourhoods around Greater Manchester changing?

The answer to the first question — are north west suburban office markets experiencing an uplift? — is the hardest to answer definitively. But a spate of deals implies the answer is yes.

Because so much out-of-town and suburban real estate is in private or independent hands, aggregated data is hard to find. But if anecdotal evidence is allowed, then there is every reason to suppose suburban offices are enjoying a moment in the sun.

“During lockdown, we reported a record quarter for new lettings across our portfolio with tenants approaching us directly as they looked to adapt their previous work set-up,” Hurstwood Holdings Chairman Stephen Ashworth said.  

“We have seen a significant increase in demand for our suburban office suites and recognising the immediate change in demand from occupiers no longer requiring big open workspaces, we implemented a significant refurbishment programme of a number of our offices to provide small suites of 200-500 SF. This change in tactic has proven to be very successful.

“Our tenants still want office space but now seem to prefer to be closer to home. We are now looking at rolling this concept out at three of our other office schemes in Cheshire, Lancashire, Greater Manchester and, indeed, nationwide.”

Another example: UK regional value-add fund Squarestone Growth let more than 100K SF across its 2M SF out-of-town office portfolio between March and July 2020. It also secured 99% rent payment for the quarter, compared to record lows across the sector. 

“The vacancy rate in our 45K SF St Helen’s location was always around 20% before the pandemic; now it's 5% and falling because occupiers like a rent of £12.50/SF, their own front door and parking," Squarestone founder Paul Coulter said. "The same is true in Warrington, which also always lagged our Manchester sites, but now occupiers are quite happy to be offered a reason not to drive down the M62 to Manchester.” 

In south Manchester its 7.5-acre Manchester Green business park is also humming.

“It’s about car parking, it’s why our sites have done better than some others,” Coulter said. “We need to understand that the car is not the enemy, which of course means installing electric car charging points, which is expensive, but you have to invest in your buildings for the future.”

Coulter said his tenants demand some city centre-style amenities but that this doesn’t need to be a problem for landlords.

“It’s often as simple as a café. Just somewhere to walk to get a good cup of coffee, the kind of place they recognise where they could have a business meeting,” he said.

The biggest obstacle in the path of providing more of this kind of coronavirus-proofed office space are council planners, Coulter said, although he confesses that councils are ready to respond when they see the link between amenity and office jobs.

Are councils pulling in the right direction? It’s early days but two locations — Rochdale and Withington — point the way ahead.

Earlier this week Capital & Centric launched a new housing concept in Rochdale designed to bring residential communities into the town centre. 

The developer is working with Rochdale Borough Council and Rochdale Development Agency to redevelop the former Central Retail Park site into a thriving new community. In a flash of insight they have called their new concept "Neighbourhood."

Neighbourhood Rochdale will include more than 200 suburban homes for rent, including a mix of modern, spacious and low-carbon homes along with a linear park, running track, gym and community hub alongside community space such as café-bars and delis. And if that sounds more like the amenity offer of an office block than a Rochdale housing scheme, then that’s because it is. It aims to reinvent suburban living, designing homes and communities that suit how people live today, using modern methods of construction with open-plan, design-led homes.

“Many Greater Manchester towns have been hit hard by the declining high street, but there’s a huge opportunity for places like Rochdale to reinvent themselves with town centre living,” Capital & Centric co-founder Adam Higgins said.

“Neighbourhood is our way of bridging the gap between urban and suburban living. An antidote to poor quality, outdated and uninspiring housing types, it recognises that people want to live in communities, not just homes. So, in Rochdale we’re planning plenty of green space, a community hub and café-bar. With easy links into Manchester and a proper mix of homes, we see it appealing just as much to young professionals as downsizers. It’ll also be pretty unique in that it's suburban homes but all of them will be for rent.” 

Head south to Withington and the same problem is being offered a slightly different solution.

Withington could be a rival to near neighbours Didsbury, Chorlton and the Heatons as the home for Manchester’s city-dwelling professionals, but too many years as an unloved student ghetto have kept its prices low and its reputation modest. Amenities are some way below those in other suburbs or Manchester city centre.

Manchester City Council is now consulting on a new strategy for the suburb which will see it transformed into exactly the kind of place home workers will love.

“COVID-19 reinforces the need to develop support for Withington Village,” the document said, reporting that footfall fell appreciably less steeply in Withington (down 50%) than national or regional figures (down 84%) during the lockdown.

“Many people may wish to remain local for the foreseeable future when seeking out leisure and retail opportunities,” the strategy added, recommending more temporary events, markets and pop-ups to keep the atmosphere lively.

Smartening up buildings and improving pedestrian opportunities along a crowded major highway are also proposed. More families, a stronger offer focused around attracting enterprising bars and cafés, and investment in a handful of prominent sites will unlock potential. Independent retailers are the key, the document insisted.

Didsbury resident and Cushman & Wakefield Head of Manchester Caroline Baker sees much to approve in both the Withington and Rochdale examples.

“The key to making this work is the housing supply. In Withington there’s been a lot of terraced housing and student houses in multiple occupations which haven’t been invested in. They just aren’t inspirational homes, and this is where the council can intervene — as Rochdale Council is — to provide the kind of housing which will, in turn, attract people to use town centre amenities,” Baker said.

“Good schools matter, too, and green spaces for walking, and we’re likely to see people think more carefully about what is in walking distance of their home. Suburbs like Didsbury that can provide a higher level of amenities, almost like city centre-level amenities, will be more attractive and do well. But in the end, it all depends on having the right kind of housing.”

It is still too soon to say how the current convulsions in the economy and the property market will play out. Manchester, like other cities, has a lot of thinking to do. But the first draft of a new property playbook is already being written: The next 12 months will see it developed and refined as Manchester's suburban property takes on a new, more central role.