Manchester has been ranked 10th in Colliers International’s latest European Cities of Influence report released at MIPIM this week.
The city ranked 10th overall in the research while being placed fourth in Colliers’ rankings of mid-sized cities with a population of between two and five million people.
Key socio-economic factors in which Manchester impressed included boasting a strong talent pool mainly because of the future talent base offered by its top tier universities, economic output, workforce catchment area, employee quality of life and employer costs.
The analysis by Colliers showed current prime central business district (CBD) headline rents in Manchester at £35 per sq ft per year with an average CBD headline rent of £27 per sq ft per year and prime CBD yield currently five per cent.
, director and head of the North West for Colliers International, said: “Manchester continues to boast one of the highest student populations in Europe with two of the UK’s largest universities and one of the largest medical campuses in western Europe.
“The city is increasingly capable of retaining this future talent as a major force in the Northern Powerhouse, which is helping to drive greater levels of investment into the city.”
The Cities of Influence report reviews and ranks cities based on their occupier attractiveness, availability of talent, and quality of life factors alongside economic output and productivity. It ranked London as the most attractive city in Europe for a second year running, with Paris, Madrid, Moscow and Birmingham making up the rest of the top five.
This year’s new extended version of the report looked at 50 major European economic hubs – building on the 20 cities covered in the inaugural report – providing a broad geographic coverage of European markets that are of global, regional and national importance.
, EMEA Director of Client Services at Colliers, added: “Office occupier strength is the engine room for a city economy and as a driver of all other forms of real estate demand: be it retail (and thus logistics), hotels, leisure and residential. Occupational strength will also help drive rental growth and longer-term this is the most important driver of capital value – especially in an environment where yields do not look capable of compressing any further in the vast majority of markets. So this analysis should be a good marker for where investment capital should go.”
“Urban transformations and new infrastructure are also very strong drivers of investment growth. Given we are now approaching the peak of the investment cycle in terms of pricing, and thus volumes, the logical evolution of the cycle is to see a redistribution of capital into cities, illustrating a strong basis for occupier growth alongside those with new key infrastructure changes,” said Richard Divall, Head of Cross Border Capital Markets at Colliers International.
Some additional City highlights:
• Zurich, Dublin, London, Edinburgh, Warsaw
| In terms of the structure of the workforce of each city, the research also shows that Zurich, closely followed by Dublin, London, Edinburgh and increasingly Warsaw strike the right balance of workers in value-add modern professions including IT & communications, financial and business services and professional, technical and scientific roles. Many smaller and mid-size markets feature here, and it is of limited coincidence that the majority of these markets feature highly overall, and in terms of their economic productivity. This includes the major Nordic cities alongside some of the Big7 German cities, but Paris drops back as a result of over-exposure to jobs in public services and support functions. The stand-out market is Warsaw, which jumps into the top five for the first time, courtesy of employment growth combining a healthy mix of IT, professional and technical roles.
• London, Paris, Madrid and Moscow
| The prospects of employment, a career path and success will often start at the University level, and it there is a strong correlation between the overall city scores achieved with those cities providing a strong university catchment. London is a clear leader in this regard. While many German and UK regional cities feature in the top 20, many seem to underperform in terms of converting their string higher education basis and graduate talent pool into their local talented workforce and economic output. Paris, Madrid and Moscow stand out as cities that do more with their university talent, as do Vienna, Dublin and Copenhagen.
• Zurich, Stuttgart and Vienna
| Beyond university and working life, overall quality of life factors such as crime and safety, access to health care, climate, traffic commute and pollution has become more relevant and important to many, especially those of the millennial plus generations. Based on these factors we see a different picture entirely, with the top ten dominated by Germanic and Dutch markets. Munich leads this category, closely followed by Zurich and Stuttgart. Vienna is not far behind, with Utrecht evenly matched in fifth.
• Helsinki, Copenhagen, Zurich and Stockholm
| While employee-friendly factors do not put the UK in a good light, the reverse can be said of the more employer friendly-factors of market risk, operating conditions, labour law flexibility and corporate tax levels. In this regard, the UK cities sit right at the top of the rankings, which is a reminder of how transparent, flexible and open the UK is as a place to do business despite all the much-publicised Brexit ruminations. Making up the top five of ‘open market’ cities to do business are Helsinki, Copenhagen, Zurich and Stockholm. Prague and Tallinn also sit within the top twenty overall, but their low cost base significantly differentiates their offer in a positive light.