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David Lathwood, lead director of JLL, mulls the regional devolution picture
The Northern Powerhouse became something of a catchphrase in the last year of the Coalition, rolled out by the Chancellor at every opportunity, but backed up by little in the way of policy, aside from Greater Manchester and West Yorkshire's notable devolution gains.
Then, right before Parliament was dissolved the Chancellor dropped another tantalising hint of serious investment – the Transport for the North strategy. Unsurprisingly, the timing of the announcement and the high sums of money involved in delivering schemes like High Speed 3 led many to question whether this was merely electioneering.
I don't mean to sound overly cynical. Far from it, in fact I believe the creation of a Northern Powerhouse is a legitimate prospect. We've already started to see the North West benefit from a kind of 'Northshoring', with companies reconsidering the cost of basing large numbers of staff in the capital, leading to increased demand for office space, particularly in Manchester city centre. The property investment market tells a similar story. Both UK and overseas investors are already turning their attention away from saturated markets in the South East towards the region in search of better yields.
Delivering greater connectivity between northern cities has the potential to not only increase this but the spread to benefits across Merseyside and Yorkshire.
This potential is captured in some recent research from JLL, which shows that, when taken as a whole, commercial real estate investment transactions across Liverpool, Manchester and West Yorkshire totalled £2.23 billion last year. While that's a fraction of the £28 billion experienced in London, what's significant is that it represented a 66 per cent year-on-year increase. In contrast the capital experienced no growth.
This potential is why improved, faster transport connections between Liverpool, Manchester and Leeds is such a crucial issue. When you consider that the distance from Manchester to Leeds is the same as London's Central line, then the potential for High Speed 3 to unlock growth is significant.
With a stronger Conservative mandate than under the previous parliament, and the country avoiding the unproductive political uncertainty many predicted in the run up to the election, there should be nothing holding the Chancellor back from acting on his vision for a northern powerhouse. Infrastructure is the natural place to start and the region's businesses will be looking for a firm commitment in the coming weeks.
Lead Director - North West
Head of UK Regional Marketing and Communications
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