Leading Indicators | The Manchester Model: Can devolution unlock the next wake of UK CRE growth?

Manchester is setting the pace for growth among UK and European cities

Manchester is forecast to be one of Europe’s faster-growing cities in 2026, with GDP growth of 2.1%. Its concentration of knowledge-intensive business services continues to support the city’s economy, with professional services output projected to rise by 3.6%, more than double the European city average. Longer term, Manchester is expected to maintain this relative strength, with GDP growth forecast at 2.4% in 2030, ahead of both the UK (1.5%) and European city (1.8%) averages.

Capital is following the growth story  

That relative economic strength is also being reflected in Manchester’s investment market. Commercial real estate investment volumes are up +34% year-to-date in 2026, while Q3 activity was +77% higher than a year earlier. The pick-up in activity points to continued investor appetite for the city, with Manchester’s longer-term growth prospects helping to support its position as a key destination for regional UK capital.  

Priced for opportunity - the regional return story 

Manchester has set the pace among UK regional cities, supported by sustained investment in skills and infrastructure and a relatively mature model of devolution. Greater local control over areas such as transport, skills and regeneration has helped create a platform for growth, with Manchester forecast to deliver average annual All Property total returns of 7.3% over the next five years. The October Budget could bring renewed focus to devolution and regional investment, potentially giving other cities greater scope to build on local strengths, support regeneration and attract CRE investment.