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We Love Manchester Offices, But BTR Skyscrapers Not So Much

Tristan Capital Partners and joint venture partners Ask Real Estate and the Richardson Family, have signed a forward funding agreement with Salford City Council to develop 100 Embankment, Salford, Greater Manchester
The Embankment scheme, Salford

Two big funding deals have given a £200M-plus vote of confidence to Manchester's office market. But according to Tristan Capital Partners — which is backing Ask Real Estate's £70M development of the 166K SF 100 Embankment, Salford Greengate — they are giving the city's build-to-rent residential apartment market a wide berth.

The Tristan deal came as Aviva Investors forward-funded the £113M Two New Bailey office scheme developed by English Cities Fund. The 187K SF block across the river from Spinningfields is due for completion by late 2019 following a pre-let to Salford council.

Tristan Capital Partners Senior Partner Cameron Spry said he has an appetite for more office investment in Manchester — but the fast-moving BTR residential sector does not appeal. The large number of new BTR skyscraper plans — hailed by some as a sign of the market's confidence — are among the things putting Tristan off investing.

Aviva Investor's fund £113M Two New Bailey office scheme, Salford
Two New Bailey, Salford

"We've looked in the past at Manchester BTR, and it is interesting at one level," Spry told Bisnow. "But I'm a bit cautious on the amount of potential supply. It is still a relatively new market, and relatively new markets suffer from an over-exuberant phase. I'm not saying that's happening now, but it is just something to watch out for."

"The city council is ready to consent to very tall buildings in a way other cities are not, which means there is potential for more supply simply because of the height — and that gives us pause for thought."