Deloitte study showed mixed picture across city region residential, office, hotel and student sectors
Cranes over Manchester city centre (Image: Sean Hansford | Manchester Evening News)
Manchester still has a strong pipeline of building projects despite cost challenges that slowed the residential sector in 2025 – that’s the message from the latest Deloitte Crane Survey that showed a mixed picture across the city’s key sectors.
The study reported reduced levels of activity in the residential and office markets, but increased activity in the student accommodation and hotel sectors. The number of new starts in Manchester dropped to 17 in 2025, from 20 in 2024, while on-site projects under construction sat at 58.
Deloitte’s Regional Crane Survey monitors construction work across four key cities – Manchester, Belfast, Birmingham and Leeds. Across those cities, 53 new construction starts were recorded in 2025 compared to 47 in 2024.
The Manchester report showed seven new residential schemes began construction in 2025 – below 2024, when 11 schemes started, but on par with 2023. The number of units under construction fell below 10,000 for the first time since 2016 – standing at 8,023 – with 3,422 units completed over the year.
But the report says there will be an uplift this year thanks to the city’s strong construction pipeline. Some 5,500 residential units are expected to complete in 2026, the second-highest figure since the Manchester Crane Survey began, while another 15,332 homes have planning permission.
John Cooper, real estate and infrastructure partner at Deloitte, said: “Manchester’s residential sector continues to be a key enabler of significant population growth in the city centre, yet faces a critical balancing act. While 2025 saw reduced activity due to inflationary pressures and regulatory changes impacting construction timescales and market confidence, residential construction levels remain strong, reflecting the city centre’s enduring appeal as a beacon for investment and regeneration.
“However, a robust pipeline for 2026 should support continued strong levels, though a more cautious and selective approach from investors means developers must work harder on their proposals. Public sector funding will also be crucial in unlocking projects that support ‘good growth’ amidst ongoing headwinds. A focus on further investment, timely decision making and labour force skills are essential to driving construction activity.”
Co-op Live and Aviva Studios drive hotel market
Deloitte says the openings of Co-op Live and Aviva Studios have helped drive Greater Manchester’s visitor economy, and with it hotel construction.
Three new hotel schemes started construction in 2025, with the number of hotel rooms under construction now standing at 1,621, while 391 new rooms were completed in 2025. In retail, 287,000 sq ft of space is under construction.
Mr Cooper said: “Events capacity in Manchester has been significantly increased over recent years, with the city able to host multiple major events all in one weekend. Investment in the city’s hospitality and leisure sector is facilitating this. There is a strong pipeline of new hotel rooms and retail space, along with strategic infrastructure projects making Manchester a more attractive place for visitors, boosting the city’s global profile.”
Universities driving demand for student accommodation
The report showed student accommodation building activity grow in 2025 after “a slower few years”.
No new bedspaces were delivered in 2023 and 2024, but 2025 saw 1,803 new bedspaces completed. Four new schemes started construction in 2025, with five schemes in total now under construction delivering 3,894 bedspaces to market.
Meanwhile education and research institutions themselves are also helping to change the face of the Oxford Road corridor. Over the last 15 years, 3m sq ft of new education and research facilities have been built.
Last year Deloitte reported one new start – the 458,000 sq ft Upper Brook Street scheme – while there is another 2.1m sq ft in the pipeline.
Mr Cooper said: “Manchester has become an internationally renowned city for science, technology and innovation, with its region’s universities welcoming thousands of students every year. With over two million sq ft of space delivered since the Corridor’s Spatial Strategy endorsement in 2017, the city’s innovation district is helping to drive world-leading research and stimulate regional growth.”
Offices: ‘Healthy pipeline’ despite cost challenges
The Deloitte study showed one of the highest office completion rates on record, with 1.26m sq ft coming to market – the highest level since 2008. There is also another 5.34m sq ft of space that has secured permission but is yet to be built, offering a “healthy pipeline”.
But the report showed only one new office start in 2025 – Republic at Mayfield – with total office space under construction standing at 821,000 sq ft.
Mr Cooper said: “Manchester’s commercial office market is characterised by strong demand and low prime vacancy rates. Despite challenges in new supply due to increased capital costs and construction inflation, the market is responding strategically. This includes a focus on high-quality refurbishments, which are meeting demand for flexible workspace alongside more traditional lettings.
“2025’s new office start at Mayfield will help to address a shortage of premium new build office space, pointing to improving viability and a likely future market correction in higher rents.
“A combination of these strategic projects and public-private funding models, including support from the Greater Manchester Good Growth Fund, will be crucial for meeting demand and unlocking future development.”
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