Property market to bounce back from 2010, Atisreal exec says

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3:31 pm, February 24, 2009
Property market to bounce back from 2010, Atisreal exec says

By Simon Binns

Innovation and investment in Manchester’s knowledge capital will see the city through the recession and keep talented workers in the borough.

That’s the view of the head of Atisreal’s Manchester office, speaking at the firm’s economic forecast seminar earlier today.

Andrew Hamilton said Manchester had probably been the regional city that has “benefited most from the rising market” over the past 15 years, through an “astute” city council and an “innovative or entrepreneurial” property sector.

“Currently we may not see the same level of central government assistance for regional cities, as the public purse is shrinking and there are other demands on it,” he said.

“However, we retain our property expertise and the innovative, independent spirit that has made the city what it is today, and contributed to its worldwide brand.

“My view is that we need to innovate. One way to do this is by capitalising on our renowned universities in the region. These need to be invested in further, they need to be promoted and the talent pool retained in the city.

“Knowledge industries could be key to our future but they will need to sit alongside appropriate manufacturing capability. Whilst we cannot expect to return to mass production, high value, specialised manufacturing, which we should remember we are already very good at, will need to sit side by side with these knowledge sectors.”

Atisreal’s head of research, Keith Steventon, predicted the property market in the North West would begin to bounce back from 2010.

In 2008, the worst falls in capital growth across the region came in the industrial sector, with falls of 27 per cent. The office and retail sectors saw falls of 25.4 per cent and 25 per cent respectively.

The region’s commercial property market looks should expect to see capital growth continue to fall across all sectors throughout 2009, he said, with industrial values decreasing by 12.7 per cent whilst offices and retail will see falls of 9.2 per cent and 8.6 per cent respectively.

Rental growth in the North West will experience the worst falls throughout 2009, however. The retail market will see the largest decreases of 7.8 per cent, whilst offices and industrial will experience falls of 7.4 per cent and 6.9 per cent respectively. This will begin to relatively improve throughout 2010, 2011 and into 2012, according to Atisreal research.

“We believe that by 2011 we could see a significant improvement in capital values, leading to very high total returns as the market comes back,” he said. “The return to growth is encouraging, but it will not be a miracle return to the boom years.”

Comments? sbinns@crain.com