Forget the sloping roofs and chimneys of Coronation Street. Manchester’s skyline is changing beyond all recognition and is now increasingly defined by sleek, modern skyscrapers.

Chris Perkins

The city is in the middle of a major real estate investment boom thanks to a strengthening economy, a large and well-educated population and a lack of supply.

For us, the attractions are clear. Putting our (and our investors’) money where our mouth is, M&G Real Estate made more than £400m of acquisitions in Manchester in 2014, making it our second most actively invested city globally last year.

The most significant of these deals was the £320m Spinningfields acquisition, spanning some 500,000 sq ft of prime Manchester office space. We believe this is one of the largest UK regional office transactions on record.

The deal underscores the appeal of Manchester in particular - and of the UK’s big six regional cities in general - to major institutional investors. This is backed by proprietary valuations and analysis from our research team. They highlight Manchester as one of the most attractive regional office markets thanks to a range of factors, including relatively low grade-A availability as a percentage of total stock, solid rental growth, large overall population and strong demand credentials.

Ultra-prime assets in top central London locations are starting to look expensive, so the time is right to look for investment opportunities beyond the capital. The Spinningfields deal showcases how Manchester can offer the kind of secure, income-driven long-term returns that are the holy grail for heavyweight pension fund investors. The offices are leased in their entirety to RBS for a further 23 years and are subject to annual fixed uplifts of 3%, offering the very important element of inflation protection.

One of the attractions of the Spinningfields investment was that such prime, modern buildings are still relatively rare in Manchester. This in itself, however, opens up more great investment opportunities, be that through new developments or refurbishment.

We see both these areas as major drivers of UK real estate returns - the development of new, sustainable buildings in strong locations, and active management of existing properties, including their refurbishment, to better adapt to the changing needs of our customers. Manchester’s strong fundamentals make it well placed to benefit from both these trends and to continue to attract the attention of investors and developers, creating a virtuous circle for the City.

Chris Perkins is head of business space at M&G Real Estate