By Paul Kelly, Group Managing Director, Scarborough Group International
For much of the past two decades, Greater Manchester has been one of the UK's most compelling investment stories. It has consistently outperformed expectations, attracted global businesses, created thousands of new jobs and transformed perceptions of what a regional city can achieve. That story is now well established.
The conversations we have with institutional investors today are noticeably different from those we were having ten or even five years ago. There is far less discussion about whether Greater Manchester has earned its place alongside London's established investment markets and much more focus on identifying the neighbourhoods that are best positioned to benefit from the city's next phase of growth.
That is an important distinction because it reflects the maturity of both the city and the investment market.
Development capital has undoubtedly become more selective. Higher interest rates, increased construction costs, more demanding regulation and a more cautious lending environment mean investors are scrutinising opportunities more closely than they have for many years. Yet despite those headwinds, Greater Manchester continues to attract significant institutional investment into the Living sector.
In our experience, that isn't happening because investors are chasing the next emerging market. It is happening because Greater Manchester has spent the best part of twenty years demonstrating that it possesses the economic resilience, connectivity and long-term fundamentals capable of supporting sustained residential investment through changing market cycles.
Residential investment has always been underpinned by economic confidence.
People choose where they want to live for many reasons, but employment opportunities, career prospects and quality of life remain fundamental drivers of long-term housing demand. Cities that continue to attract businesses and highly skilled workers invariably create stronger and more resilient residential markets, and Greater Manchester has consistently demonstrated its ability to do both.
The latest economic data reinforces that position. Greater Manchester is now the UK's fastest growing city region economy, recording average annual GVA growth of 3.1 per cent between 2015 and 2023, more than double the national average. The city region's economy has exceeded £100 billion for the first time, productivity growth has outperformed every other UK city region over the same period, and the number of businesses has increased by 22 per cent since 2015, almost twice the national average. Greater Manchester also continues to attract more foreign direct investment than any UK city region outside London.
Those figures tell us something important.
Greater Manchester's growth is no longer being driven by a single sector or one exceptional period of investment. Financial and professional services continue to perform strongly, but they now sit alongside nationally significant strengths in technology, digital, advanced manufacturing, life sciences and the creative industries. Combined with internationally recognised universities and one of Europe's largest graduate populations, the city has developed a diverse economy that continues to attract talent, create employment and support long term residential demand.
For investors, those are the fundamentals that matter because successful residential markets ultimately follow successful economies.
There was a time when simply having exposure to Greater Manchester represented an investment strategy.
Today, the market has become considerably more sophisticated.
Institutional investors are increasingly looking beyond headline rental growth and population projections. They want to understand how neighbourhoods function, whether infrastructure has kept pace with development, how places connect into the wider city and, perhaps most importantly, whether there is sufficient confidence in long-term delivery to justify deploying significant amounts of capital.
That reflects the way the Living sector has evolved.
Build to Rent has matured into an established institutional asset class, while mixed tenure neighbourhoods are increasingly being viewed through the lens of long-term operational performance rather than simply development returns. Investors are placing greater emphasis on resident retention, quality of place, connectivity and stewardship because they recognise that successful neighbourhoods create more resilient income over the long term.
It’s no longer simply about constructing buildings. It’s about creating places where people choose to stay.
One of the reasons Greater Manchester continues to stand out is that it has consistently demonstrated an ability to deliver regeneration at scale.
That should not be underestimated.
Many cities have ambitious masterplans and significant development opportunities. Far fewer have a track record of translating those ambitions into successful neighbourhoods over many years and through changing economic conditions.
Greater Manchester has repeatedly shown that long-term regeneration is possible because it has benefited from sustained collaboration between the public and private sectors, continued investment in transport and infrastructure and a willingness to take decisions that support growth beyond individual political or economic cycles.
That consistency matters to investors.
In a market where development has become more challenging, certainty has become increasingly valuable. Investors want to see evidence that infrastructure is progressing, enabling works are underway, partnerships remain strong and schemes are continuing to move forward despite wider market conditions. Those factors do not remove risk, but they provide confidence that projects have both the commitment and capability to reach completion.
Middlewood Locks is a good example of how Greater Manchester's wider growth story is translating into long-term investment opportunities.
When work first began, the vision was to transform a largely disused brownfield site into a new mixed use neighbourhood connecting Salford and Manchester City centre. Ten years later, that vision has become a reality. More than 2,600 people now live at Middlewood Locks, supported by high quality public realm, independent businesses, excellent connectivity and a genuine sense of community.
That success has not happened by accident.
It has been built through long term collaboration between Scarborough Group International, Metro Holdings, Salford City Council and the National Housing Bank, Homes England, alongside a shared commitment to delivering a neighbourhood rather than simply completing a development.
The recent funding announcement from the National Housing Bank, Homes England, marks another important milestone in that journey. It supports the next phase of enabling works that will unlock the delivery of a further 909 homes, while reinforcing confidence in a partnership that has consistently demonstrated its ability to deliver over the long term.
There is always a temptation to judge cities by the number of cranes on the skyline or the volume of transactions completed in any given year.
Those indicators are useful, but they only tell part of the story.
The cities that continue to attract institutional capital are those with strong economic fundamentals, diverse employment, sustained population growth, investment in infrastructure and a proven ability to deliver successful regeneration over many years. Greater Manchester has spent the last two decades building exactly those foundations, and the latest economic evidence suggests that momentum is continuing rather than slowing.
From our perspective, that is why institutional investors continue to back Greater Manchester.
They are investing in a city that has consistently demonstrated its resilience through different market cycles, continues to create the jobs and opportunities that underpin long term residential demand and has established a track record of delivering neighbourhoods that evolve over time rather than simply completing developments.
As the market becomes more selective, those qualities are only becoming more valuable. The opportunity is no longer simply investing in Greater Manchester. It is identifying the places within the city that have already demonstrated their ability to deliver, continue to evolve and create lasting value for residents, businesses and long-term investors alike.
