Zombie Developments: Are These Four Sites The Living Dead Of Manchester Property?
If Manchester's economy is booming — with office take-up in the city centre sky high at over 1.21M SF — why do some office sites stubbonly resist development?
"There's zombie sites all over the city. You kind of blank them out after a while, you just don't see them because they've been a problem for so long," Capital & Centric director Tim Heatley said.
Could these four sites be Manchester property's living dead? Or is there hope for them yet?
You all know what a zombie is: dead but still walking, struggling up from its grave for yet another unrefreshing stroll round town. Along the way it will suck the life out of those it meets.
Property zombies are no different.
Bisnow spoke to a wide range of Manchester property professionals and developers and these were their nominations.
1. Trapped On An Island
The Island site has been on the brink of an exciting redevelopment for most of this century. The 55K SF cluster of office and restaurant space bounded by John Dalton Street and Ridgefield includes Grange House, 5 Ridgefield and Old Colony House.
The site has been touted as a redevelopment opportunity since the late 1990s. Nabeel Choudery's Property Route acquired it in 2004, paying £11M. In 2006 Property Route sold the site to a consortium for £15M. The new owners talked of reconfiguring the space ahead of a planning application but by 2011, with the recession still biting the consortium, local investor-developers Bluemantle and Reflect Development decided to off-load.
The site was acquired by the pension fund-backed Greater Manchester Property Venture Fund — at that low point in the economic cycle the most active force in Manchester property. The sale price was not disclosed but the asking price was £8.3M.
Six years later, GMPVF sought a development partner and in November 2017 they selected Henry Boot Developments, who had recently completed a nearby 36.5K SF Courthouse leisure development, Deansgate.
Only a zombie's stagger from Worthington Properties 130K SF 125 Deansgate speculative development, and the controversial St. Michael's development promoted by Manchester United star turned developer Gary Neville, the Island site ought to be well placed.
When Bisnow checked out the site last week advertising banners were still offering good-value office space to let.
Bisnow asked Henry Boot for a statement on the likely timetable for agreeing the joint venture with GMPVF and making a planning application, but none was received.
2. Let's (Not) Do The Show Right Here: Threatre Royal, Peter Street
If you are a certain age — and of a certain disposition — you will have fond recollections of Discotheque Royale, the nightclub that operated in the old Theatre Royal, Peter Street under various names until 2009.
Manchester's oldest theatre, opened in 1845, has not seen a live show since 1928 and has since been a cinema, bingo hall and dance venue. In 2008 plans were floated to replace it with a 28-storey hotel. In 2012 it was sold by Lombard Asset Management to Edwardian Group, who own the Radisson Hotel next door. Nearly six years have passed and the Grade II listed building remains on the Theatre Trust's "at risk" register. Speculation that the site would see an 800-cover ballroom and apartments have come and gone.
OBI Property advised on the 2012 sale. "Development of the building is riddled with commercial difficulties," OBI Head of Transactions Richard Lace told Bisnow, referring to the costs and difficulties of building on a protected site.
Aspirations to reopen the site as a theatre have not quite died, adding another complication.
Could the site become a hotel after all? Hotels within the ring-of-steel around the Manchester Central convention centre are at a premium, so it would make sense, but for now who knows?
3. The Internet Is To Blame: Major Street Car Park
Maybe not a Zombie, perhaps just a Sleeping Beauty? The Major Street car park, next to Minshull Street Crown Court, has survived three property booms without development. Will it survive another?
Escalating property prices in its immediate vicinity have revived interest in the future of what has long been a surface car park. Auctions have seen sites change hands at more than double the asking price.
Despite being immediately opposite 1990s apartment schemes, it was never developed for apartments. Despite being behind the 11 Portland St. office complex, it never became offices. Despite being on the edge of Manchester's gay village, it never developed the smallest whiff of chic.
It could be because the site sits on the junction of the trans-Atlantic telecoms cables and the U.K. system: basically Major Street car park sits on top of the internet.
Asked by Bisnow to say what it planned for Major Street, landowner Aviva Investors helpfully explained: "This site isn’t empty and is an operational NCP car park."
Pressed to say if it would remain a car park a spokesperson said: "Aviva Investors are always actively looking at their portfolio but not aware of any live plans for the site."
4. Abe Keeps Watching: Brazennose House
Abraham Lincoln has been looking out over empty Brazennose House for several years, and he has not seen much movement. M&G Real Estate has been considering the future of the roughly 100K SF block for some time. In 2011 a 150K SF redevelopment won planning permission. Rights to light issues meant a rethink and a joint venture with Yorkshire developer CDP Marshalls (who beat Keir for the job) was sealed in 2015. The the result was a 2016 planning application for demolition and replacement with 143K SF over seven floors.
It was reported in June 2016 that the £90M scheme was near to a funding deal, but since then the trail has gone cold, a chill encouraged by the furore next door at the Giggs/Neville St. Michael's site where controversial tower plans fell foul of public opion and were subsequently revised. There have since been small signs things may be warning up. In October M&G said they were "putting a timetable" on the Brazennose redevelopment.
M&G — who last week agreed to an £80M retail funding deal in Rochdale — declined to comment when approached by Bisnow. However, with legal issues now sorted with joint venture partners movement is expected this quarter.