Focus on UK Cities

2020 was a year like no other. The pandemic has accelerated many structural changes that were already taking place across our cities. How we live, work and play has changed and that is reflected in the key trends across retail, offices, industrial and housing.

These trends present opportunities and new ways of thinking about how real estate can be better leveraged to benefit our economy, communities and the environment.

Our 2021 Forecast reports delve into the detail of what the year ahead holds for our local markets, communities and businesses.


Before Covid-19 Birmingham’s economy had been performing relatively well and accelerating. It had higher GDP growth than the UK and European city averages in three of the last five years and the highest population growth in the UK outside of London. Its strength in the professional & other private services sector, which accounts for roughly a quarter of regional output, is one of the underlying factors that has been driving the healthy economic performance since the Global Financial Crisis. Only the South East and London have a larger share of GVA in this sector.


The outlook for 2020 prior to Covid-19 was positive for Bristol, with business investment and hiring anticipated to increase over the year following low growth in 2019. Despite restrictions, Bristol showed its economic resilience in activity in the latter half of 2020, driven by a strong community infrastructure, and a number of innovative approaches to encouraging people to eat out and shop locally.


Covid-19 has unsurprisingly had a significant impact on the youngest capital city in Europe. The Welsh firebreak and the city’s emergence from tight restrictions, as much of the UK was going into a second lockdown, put Cardiff at the forefront of the UK’s economic recovery and highlighted the desire of the city’s residents to get back to some semblance of normality.


Office take-up for 2020 was relatively robust off the back of Baillie Gifford acquiring 280,000 sq ft on a 20 year lease at Haymarket which it will occupy from 2023. The deal is a major fillip for the Edinburgh market, as the Investment Manager consolidates its presence in the city. Otherwise, activity elsewhere in the city has been unsurprisingly scarce.


The restrictions imposed on Glasgow has meant that the city was under lockdown for the majority of 2020. Looking forward, as restrictions ease in 2021, we expect to see the continued evolution of the city through the Glasgow Innovation District (GCID), an increase in city centre living and the development of Buchanan Wharf - historically one of the most deprived areas of Europe - into a commercial hub for the city.


Last year we saw major regeneration programmes in Leeds act as a significant catalyst for further public and private sector investment which ultimately will lead to substantial economic growth for the city. Whilst the pandemic has slowed things down to some degree, the regeneration programme, with particular focus on the South Bank places Leeds at the centre for further public and private investment.


Looking forward into 2021 and beyond, the outlook remains positive for Liverpool. The loosening of major restrictions which have engulfed the city for much of 2020 will allow Liverpool to focus on regaining the strength it held prior to the pandemic. Although this will not be immediate, the resilience demonstrated by the local economy – as shown by the UK Cities Recovery Index – means that there is a firm foothold to launch the recovery during 2021.


London is the UK’s economic powerhouse, it accounts for 13% of the population but 24% of our Gross Domestic Product (GDP). In Inner London this is even more pronounced, at 5.4% and 16% respectively. It is one of the few truly global cities and outperforms national and European city averages in virtually all structural economic measures. Yet much of what gives London this strength left it more exposed to Covid-19 in 2020 and will present challenges in its recovery that other parts of the country will not face in the same way.


Manchester is well positioned for a robust recovery across its real estate in 2021. This is underpinned by its strong economic growth and business expansion over the last five years which stand it in good stead to bounce back from the shock of Covid. We expect residential capital markets activity to be strong and the industrial sector to continue to perform well. The office market will become more complex as there is increased divergence between the performance of prime and secondary space.


The last decade has seen significant change in Newcastle, with the quality of the built stock improving and the city’s status as a home for technology developing. This has been off the back of growing private and public sector investment in the city which is set to continue.

South East

The South East of England is the largest regional economy outside of London and its fundamental strengths leave its real estate markets relatively well positioned for a robust recovery in 2021. Supported by the strength in life sciences, tech and engineering we expect to see Oxford and Cambridge’s office markets continue to perform well, markets like Slough and Reading will take time to recover.


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