The new property boss at Manchester Airports Group has warned against short-termism and said the economy still has ‘a long way to go’.
Lynda Shillaw, MAG’s newly-appointed divisional chief executive for property, has dampened speculation that Manchester’s economy was bouncing back to boom-time levels.
“There has certainly been a recovery in the market over the last 12 months, in part this is down to a release of bottled up demand, but I also think that the market is normalising as occupiers’ confidence in the strength of the recovery increases and they begin to invest to grow,” she said.
“I think it is also important to remember there is still a long way to go yet and whilst there is increased optimism, both landlords and occupiers are operating within a very different, much more cautious marketplace.
“It is not about developing or acquiring space at any cost, businesses are still looking for value for money as a number of their costs such as wages and materials begin to increase. There is also the expectation of interest rate rises in the near term.
“Property is a long term game and short-termism is rarely a winner. For MAG Property, like many other developers, the next six months is about building not just on the last six months, but on the last six years.”
She warned: “We are in an investment-led recovery rather than a consumer-led one, in reality you need a balance of the two to drive demand for real estate.”
Shillaw, a former managing director at Manchester-based Co-operative Estates, arrives at MAG’s property division as work on the £800m Airport City scheme begins to gather pace.
Beijing Construction Engineering Group has agreed a joint venture to promote the development.
“Investors are increasingly turning their attention to the regions, seeking out opportunities that provide diversification and can deliver better returns than London and the south east,” said Shillaw.
“From past experience, this stage of the cycle always brings strong investment interest.
“Our own joint venture partnership with Beijing Construction and Engineering Group, Carillion and the Greater Manchester Pension Fund on Airport City Manchester, is an example of this. Whether investors are seeking business growth, new markets or good value opportunities, increasingly the UK regions are attractive places to invest.”
Data published earlier this week by PwC shows that growth in north west economy is expected to pick up from 1.6% in 2013 to around 2.9% in 2014.
Whilst this is an improvement, it still places the region slightly below the UK trend of 3%, and a long way behind London on 3.4%.
UK growth is expected to ease slightly in 2015 to 2.6% as consumer spending is reigned in.
Iwan Griffiths, PwC’s North West chairman, said: “These latest figures show the north west economy is now gathering real momentum as business investment starts to pick up.”