– Written by John Moffat.
As the spice girls taught us in the late 90s, ‘too much of something is bad enough’ but also ‘too much of nothing is just as tough’. Who knew back then that they were singing about the current residential market in Manchester city centre?
To your average Hong Kong based investor, it must feel like every other day there’s a new opportunity to purchase an apartment (or ten) in a shiny new tower in Manchester. Yet to a Mancunian owner occupier, those opportunities are none existent. Too much of something, and too much of nothing, all at the same time. Manchester’s had it tough it seems.
We picked up a lot of press when we decided to sell the apartments at Crusader Mill to owner occupiers, with some pieces seeming to vilify the investor market. However it was never our intention to suggest that all residential developments should be sold to owner occupiers, just that there’s too much of nothing in that sector currently.
Developers tend toward a herd mentality – where one succeeds others will follow – which is why there is such a need to disrupt the current supply bias. The overseas market has been a rich hunting ground for developers over the last decade and currently seems to be the automatic exit strategy for any given residential scheme in the city.
It's our hope that by proving to the market that there’s a viable alternative to the current norm, others will follow suit and soon owner occupiers will have a number of developments to choose from, just as overseas investors do.
But that doesn’t mean we should swing to the other end of the spectrum and never sell to investors! When housebuilding dropped off a cliff after the credit crunch in 2008, it was those investors pouring their money into key UK cities that got the city centre residential market back on its feet. The city centre market depends greatly on inward flows of capital from overseas and so we shouldn’t belittle the part that investors play, just as we shouldn’t be overlooking the need for a strong owner occupier market. They are equally important, just as institutional investors are, to a healthy, thriving city centre economy.
The next step is to build more apartments that are actually big enough to live in, because as Foo Fighters once sang, ‘there never seems to be enough space’.
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