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Columbia Threadneedle Renegotiates £510M Manchester Airport City Deal As Coronavirus Strikes

Airport City Manchester 92K x 2 speculative office development September 2018
The two speculative blocks at plots E1 and E2, Airport City

This is not a good year for airports. Government figures, released on 7 April 2020, showed that air traffic in the UK has plunged by 92% compared to the same day in 2019.

Manchester Airport hoped that a £510M property portfolio sale, which included a 50% stake in the flourishing Airport City development, would boost its revenues. Now the coronavirus pandemic that grounded the planes may have screwed up the deal.

Asset manager Columbia Threadneedle has pulled back from a deal to buy the portfolio citing a material adverse change in circumstances, React News reports.

It had been in talks to acquire the portfolio in a deal backed by Middle Eastern money at a price of £510M. The deal is said to be in peril because the price is now regarded as too high. Columbia Threadneedle is hoping to put that right.

The portfolio also included properties around Stansted and East Midlands airports with predominantly air-related tenancies, with annual rental income around £28M, React News said. The travails of the air transport sector puts the future of some of those businesses in doubt.

The deal was iced as city planners approved proposals for a 412-bed Accor hotel at Airport City.

"At this point talks are ongoing and we are unable to comment further," Columbia Threadneedle said in a statement to Bisnow.