HS2 And The Race To Turn Piccadilly Into The New Spinningfields
The arrival of HS2 at Manchester Piccadilly is a once-in-a-century chance to rethink the north’s major transport hub, according to the city council.
A new strategy envisages an 8M SF development zone.
However, HS2 will not roll into town until 2033 — and the likelihood is that the prime opportunities will be gone long before then. How much time is left to grab a share of what could be a new Spinningfields, or a northern King's Cross?
Piccadilly Station's immediate vicinity has never had a very savoury reputation. Of course it is not every day you find a torso (minus head) in Store Street — although that happened, the head later turning up in Staffordshire — and Temperance Street’s name has no relationship to its very earthy reputation. Even so, for decades the station area has been a place you pass through, not a place you stay.
That could all change. This week Manchester City Council’s ruling executive will approve a new regeneration strategy for the area around Piccadilly station. It promises more than 3M SF of offices and 500K SF of retail, leisure and amenity space, along with 4,900 new homes.
A report to councillors say Piccadilly is “one of the biggest, commercially-led, development opportunities in the U.K., and has the potential to make a significant impact on the national economy."
According to some property observers Piccadilly Station could be the focus for new Spinningfields — a high-gloss, high-value commercial and residential district in the south-east of the city, to balance the Allied London-led development in the north-west.
What are the chances, and how much time is there to grab them?
Investors Are Already Buying In
Developments valued at more than £250M are already underway. First arrivals include AECOM, partners of U.S. giant Tishman Construction, who are soon to be at work on a £150M scheme at Portugal Street East, to the east of the station. A joint venture of AECOM Capital and Olympian Homes is behind plans for 20- and 16-storey towers.
Capital & Centric is meanwhile at work on a £50M development of the Crusader Works, also to the east, and a £50M aparthotel concept at Ducie Street, the first test of the market’s chances of capturing Northern Quarter overspill.
“Investors and developers are already showing interest on the back of HS2 — it has crystallised a lot of interest,” Capital & Centric founder and director Adam Higgins told Bisnow.
“The opportunity is obvious," he said. "Look on Google Earth. There’s tens of acres to the east and south-east of the station with low economic use, low-rise buildings, all within the inner ring road, so city centre land not contributing to the city centre.”
The fear in some minds is that a tsunami of low-value high-rise development moves into an area with — arguably — the best public transport links in the north.
“The council have got to grab this issue and say ‘good public realm is essential’ and they need to walk away from poor quality or inappropriate development," Higgins said. "They need to be firm. U+I are trying to do something interesting at Mayfield, we are doing that too, and there are others, but the council absolutely have to stop development-by-spreadsheet. That’s the danger. Fortunately I think the city council is alive to the risk.”
Higgins concedes a tough approach on building design makes it harder for developers “but that is the right thing to do”.
It's Looking Good, But Could Planning Blight Stiffle Progress?
The difficulty for Piccadilly is that although the location of the HS2 terminal is decided — on car parks immediately next to the existing station at Store Street — and the final track alignment of the HS2 line is agreed, the station design is not, and the inter-connections between this and both the tram network and a potential Northern Powerhouse Rail high speed line to Liverpool and Leeds are yet to be decided.
The consequence is that in the immediate station vicinity — sites perhaps of most interest to commercial developments — a modest case of planning blight has set in.
The council is looking closely at creating a new underground metro tram station, and to avoid loss of land this could include an underground Northern Powerhouse Rail station, too.
“Talks are underway in government at the highest level on all these issues,” Savills Manchester Planning Director Rob Haslam said. “Decisions could significantly alter the land take, and the way Piccadilly relates to the rest of the city. Subterranean stations would be the city’s preference. The trouble is, that will be costly.”
Resolving the issue will take time — and every day that passes adds a new layer of risk to development.
“It would be a brave man who would come forward with proposals for sites closest to the station now because we simply don’t know what the land take will require, or what the station will look like,” Savills Manchester Head of Residential Sales Jamie Adam said.
The upside of the problem of planning blight is that those areas in a wider orbit around Piccadilly are already feeling a gentle uplift in values.
“Crusader Works is said to be getting sales at £375/SF, which is above the area’s historic values of closer to £325-£350/SF. So we’re seeing values increasing, but this definitely isn’t bubble-territory,” Adam said.
Adam and Haslam suggest that — as yet — land pricing around Piccadilly has yet to show any movement above and beyond the trend for central Manchester. Certainly there is nothing to compare with the notable uplifts already claimed for land close to Birmingham’s HS2 station at Curzon Street.
“You have to think of this like Crossrail in London, where land values only started to increase when construction work started. We won’t see much shift until then,” Adam said.
This could mean waiting until around 2024 before Phase 2b begins in earnest — plenty of time for new entrants to the area’s property market.
A Second Spinningfields?
Commercial prospects are likely to be phased for later in the Piccadilly area's rebirth, with the projected increase of the station's passenger numbers — 7.3 million by 2043 — the big draw. The council planning document talks of 40,000 new jobs in the area.
So far commercial development is hard to spot (if Allied London's 2019 dateline on the London Road fire station is excluded). AECOM's Portugal Street East plans include Plot D, next to the new boulevard; and the 20K SF Aeroworks, Adair Street is regarded as having commercial potential. However, the emerging masterplan is uncertain on timing — and it is listed after Phase 3, due for completion in 2022.
In the meantime Capital & Centric will dip a very small toe in the water with the 18K SF ground floor of the London Warehouse. Not quite serviced offices, not quite conventional co-working, it is going to tap into the nearby Northern Quarter's office vibe.
"Kind of bar, restaurant, co-working — all three. Something with real soul, a place to go for a drink or for work even if you are not staying in the apartments upstairs," Capital & Centric' Higgins said.
The Big Picture
For now, the momentum is building around Piccadilly. "The planned regeneration and infrastructure into this area provided AECOM with the confidence to invest early to pursue our 'Build to Core' investment and development strategy,” AECOM Senior Managing Director Ali Abbas said. Having experienced local development partner Olympian Homes on board adds to the sense of confidence.
“The danger here is that the first phases have to deliver true quality development — because everything else will follow from that. If you make sure you get the quality right, this could be a new Spinningfields,” Adam said.
It is very early days for Piccadilly but the omens are good. "In a sense it doesn't matter if HS2 happens or not, because it has already done its job of giving an impetus to regeneration, and pulled attention back to the east of the city, which arguably has the better transport infrastructure," Higgins said.
Developers now have just six short years to buy into it.