Confidential's property roundup comes via Adam Robson, Director at AKM Property Consultants
THE CHRISTMAS markets are humming, Black Friday lingers on while work Christmas parties begin to stir, it's a hectic period for us all, and it's been a similarly lively month for Manchester’s flourishing property market.
192 flats at the £32m X1 The Plaza on Great Ancoats Street have just sold out in a month
It would be odd to begin anywhere but with one of the biggest and most long-awaited property stories of the year – Britannia has finally exchanged contracts for the sale of London Road Fire Station to Mike Ingall’s Allied London. Many feel a sense of relief that one of Manchester’s most successful and forward thinking developers (Spinningfields, St John's) has managed to get its hands on this crumbling city centre gem.
Ingall said of the purchase: "It is very rare that we would wish to go beyond our focus of Spinningfields and St. John’s, but I believe this building presents a unique opportunity to create something truly iconic, particularly at a time when there is so much focus on Manchester as it enhances its international credentials.”
It's reported that Allied London paid in the region of £10 million for the Grade II-listed building, which has previously been subject to a number of high-profile CPO attempts by Manchester City Council. It's understood the City will work closely with the developer to bring forward Manchester Firehouse - watch this space.
London Road Fire StationNot one to rest on their laurels following such a big win, Allied London are also pushing ahead with their £110 million Factory Manchester project, which will form the cultural centre of their new St John's neighbourhood.
Designed by the Pritzker Prize-winning Dutch architect Rem Koolhaas, the new arts centre will become the 'flagship cultural centre for the North’ and provide a flexible 7,000-capacity space capable of hosting large-scale concerts, theatre shows, exhibitions, conferences and screenings. The Factory will also become a new base for the Manchester International Festival - more here.
And over in Leftbank, Spinningfields Allied London have announced the under-construction XYZ Building is now fully let with NCC, Global Radio and Shoosmiths snapping up over 110,000 sq ft of space within the space of a few months. It is understood the property has recently gone up for sale with a price tag of £90 million, representing a yield of 4.5%.
Big year for Allied London, and an even bigger 2016, we suspect.
Koolhaas's Factory Manchester design
Over Deansgate now to the Great Northern Warehouse where the owners have submiited plans for a new mixed-use development including: a high-rise tower to 'complement the existing Beetham'; 400,000 sq ft of apartments; a new 85,000 sq ft office building on Peter Street: 256,000 sq ft of retail and lesisure space and new public routes and squares by 2024.
New developments continue to make the press with a number of high profile schemes getting the go-ahead, including: 2 and 3 Angel Square, 350,000 sq ft of office space across two towers within the Co-op's £800m NOMA development; a 35 storey, 327-apartment at 10-12 Whitworth Street West by Brigantes and Duvet 1 Property Management; Kildareman Development Company’s 119 apartment scheme at 47 Houldsworth Street in the Northern Quarter; and easyHotel’s conversion of Bradley House (aka the ‘Flatiron’ building) - which was briefly occupied by a number of homeless activists in mid-November.
Meanwhile, over in MediaCityUK the £20m Tomorrow scheme moves forwards with project launch now expected in June 2016. The 'experimental' studio and office space will total more than 100,000 sq ft and include a 112-bed Premier Inn hotel and 23:59, a 'co-working coffee hub' to be spread across the ground floors.
10-12 Whitworth Street WestThe City Council have also approved revised plans for schemes at First Street and the seven-acre former Boddingtons Brewery site between Manchester Arena and Strangeways Prison.
The revised First Street framework will add: 1m sq ft of residential and student accommodation; an extension of the total planned office floorspace from 1m sq ft to 2.1m sq ft; 45,000 sq ft of retail and lesiure space; and a higher density of development with buildings of seven to eleven storeys.
At Boddingtons there has been a shift towards residential development, moving away from an office, leisure and retail focus. The redevelopment scheme is expected to receive on-going media attention given recent news that the Goverment may be considering the sale of a number of old prisons to make way for new housing projects, with Strangeways one of the favourites to be levelled. Could this become the next phase of a larger strategic Boddingtons/Strangways site? Depends how many civvies would want to live in the grounds of a notorious prison we suppose...
Is Strangeways doomed?The City Council can start thinking about their Christmas wind-down with the final Executive Committee of the year on Wednesday 2 December. Here they will consider two of the city’s key development proposals: the £150 million redevelopment of Bootle Street police station (to be known as ‘St. Michael’s) by the Jackson's Row Development Partnership (JRDC) - a consortium part-owned by former United stars turned property gurus Gary Neville and Ryan Giggs; and T H Real Estate’s framework for Central Retail Park on Great Ancoats Street which proposes: an apartment development; a consolidated retail park with refurbed and new units; new pedestrian routes alongside improved landscaping and public realm.
Bootle Street Police StationResidential continues to be the flavour of the month and a recent report from Deloitte Real Estate suggests that 10,000 Private Rented Sector (PRS) flats are due to be built in Manchester following increased investment in the City by pension funds, insurance companies and private businesses who want to ride the PRS wave - the British Property Federation has recently estimated that up to £30bn is ready to be invested in the PRS.
It's clear for all to see that the city centre residential market is booming, you wouldn't blame anyone for wanting a piece of the action when 192 flats at the £32m X1 The Plaza on Great Ancoats Street have just sold out in a month.
Knight Knox commented “Such successful sales of apartments in X1 The Plaza is a reflection of the confidence people have in Manchester as a place to invest.”
Elsewhere, a firm owned by Betfred boss Fred Done has submitted plans for a 405 apartment PRS scheme for The Crescent in Salford - at the site of the former Black Horse Hotel. It is the second dilapidated pub site the Salford-born billionaire’s property company have snapped up this year, after plans for a 380 apartment PRS scheme at the site of the empty Grade II-listed Black Friar pub on Trinity Way were given the green light in March 2015.
The CrescentThe Manchester office scene has also remained busy with a number of large lettings being agreed, including law firm Freshfields Bruckhaus Deringer acquisition of 80,000 sq ft of the English Cities Fund's (ECF) under-construction One New Bailey. Commenting on the sizeable letting, Phil Mayer of ECF said it:
“...represents the largest city centre inward investment letting in over a decade. The New Bailey development is ideal for requirements of this type and it is extremely pleasing that Freshfields has chosen the scheme as its new home.”
Other notable lettings include Hong Kong-based service provider, Compass Offices, taking 9,131 sq ft of space at Schroders' City Tower and setting a new record rent for this building at £21 per sq ft. Nuclear firm NuGen have also signed for an added 12,700 sq ft of 3 Piccadilly Place in addition to the 16,200 sq ft they had acquired earlier in the year. This means the building is now fully occupied and will certainly help bolster interest in the investment sale of 3 and 4 Piccadilly Place by the Carlyle Group for an asking price of £117 million.
One New BaileyThe newest scheme to be announced is that of Neo, not the Matrix character played by Keanu Reeves, but the latest offering by Bruntwood at the formally known Bank House. Work has already begun to redesign and rebrand the fifteen-storey, 52,000 sq ft building - at the corner of Portland Street and Charlotte Street – with Bruntwood stating this will be their ‘most evolved’ office project to date, costing around £8m.
Chris Oglesby, Chief Executive at Bruntwood, said: “Neo marks a new phase in workspace evolution for Bruntwood, embracing the ever-changing nature of business culture and connectivity.” Neo - derived from the word ‘neonate’, or a newborn - is expected to complete in 2016. More here
Bank House (left) and Bank Chambers (image courtesy of geography.co.uk)We reported last month that office rents have now reached £34 per sq ft and research from Lambert Smith Hampton suggests Manchester is the most expensive city to rent office space outside of London - as much as 50% more expensive than other cities.
It is, of course, good news to hear the city has recovered from the dark times of the recession and that demand for Grade A accommodation is outstripping supply, but some have raised concerns that it may put Manchester at a disadvantage when companies look to 'Northshore' (move offices out of London and up North, rather than off-shore) - with some companies looking to relocate to the cheaper Northern Powerhouse cities of Liverpool or Leeds.
There's also no sign of rental rises slowing down, as research from the RICS suggest office rents are set to increase by a further 4.3% over the next twelve months.
And finally, back to the Northern Powerhouse. In the 2015 Autumn Statement, the government has announced that a £400 million Northern Powerhouse Investment Fund is to be launched aimed at helping small businesses grow, which if taken in conjunction with the £100 million fund in the North East, will take the total fund to in excess of £500 million.
George Osborne also announced that transport spending would increase by 50% to £61 billion to fund the 'largest road investment programme since the seventies', the construction of HS2 and the electrification of lines like the Trans-Pennine.
For those of us frustrated by out-of-date payment systems on public transport, the government has also announced plans for an 'Oyster card of the North' - which could be ready by 2018.
Hold on, how did we get onto public transport? Pah. See you in 2016.
