UK regional cities are reporting record levels of construction activity as developer sentiment for city development is buoyant.

The latest reports in the Deloitte Real Estate Crane Survey series monitor construction activity in Birmingham, Manchester, Leeds and Belfast. Each city has seen a significant uptick in development across a range of sectors including: offices, residential, hotels, retail, education and student housing.

The Birmingham Crane Survey identifies 1.4 million sq ft of new office space under construction, a 50 per cent increase on the previous year (969,000 sq ft). The surge signals the highest level of activity since this report was first published in 2002, affirming developer confidence. Birmingham has also witnessed a 10-fold increase in residential schemes starting construction last year, totalling 2,331 units in the city centre.

Moving north, Manchester’s city centre is flying the flag for city-living with a record 22 residential projects breaking ground on site last year. This was eight more than the previous high of 14 in 2007 and is scheduled to deliver nearly 7,000 units to the market. The Northern Powerhouse’s skyline continues to evolve with the addition of four residential towers over 25 storeys high, all now under construction. This includes the UK’s tallest residential tower, marking a new era for the Manchester housing market.

Leeds saw 20 major construction schemes complete in 2016, including the highest level of office space (over 700,000 sq ft) delivered to market since 2007, and the city also recorded six new office starts in this survey. Retail was king in Leeds as the delivery of new shopping areas doubled the average annual total of retail space with nearly 600,000 sq ft brought forward in 2016. However, city centre residential construction remains modest in Leeds with only three new residential schemes starting last year.

Our first Belfast Crane Survey recorded a healthy 19 schemes under construction and 11 schemes completing in 2016. This included four new educational facilities, seven new student accommodation projects, six office developments and eight new hotels. Office and residential development activity was subdued representing a near term challenge, although this issue is not unique to the city. The report records 84 residential units were completed in the city centre in 2016, with none scheduled to come to the market this year.

Across the cities, the hotel sector is benefiting from serious investment as all deliver and diversify their tourist offer. The Belfast Crane Survey recorded six new hotel projects under construction, delivering in excess of 1,000 new hotel rooms. Similarly, Manchester has recorded 1,040 rooms under construction which will be the largest delivery of hotel rooms in 10 years for the city. Leeds saw more hotel construction starts than at any other time in the last decade, adding 385 rooms into the development pipeline.

Student accommodation is an increasingly active sector. Belfast has almost 2,500 bed-spaces across seven major projects being built in the city centre area. This is in addition to the 413 bed-spaces that completed in 2016. Birmingham has over 1,000 student bed-spaces coming forward to support its growing student population.

Simon Bedford, local government development partner at Deloitte Real Estate, said:

“The results of our four crane surveys reflect the growth and resurgence in the regions, breaking records set more than a decade ago. Sentiment towards city centre development is buoyant with residential rising to new levels, quite literally in Manchester, with the addition of towers that will alter the city skyline. The unparalleled scale and volume of development in the regions prompted us to monitor a further city. Belfast’s development pipeline is in good shape and we expect to see even more cranes there in 2017. All sectors are active and we conclude that our regional cities are delivering growth and investment at levels not witnessed for many years.”

Source: Deloitte