Aviva Plans Property Cluster In Manchester
Aviva is to rethink the way its £450M Manchester office portfolio works.
The move, disclosed at Bisnow's Manchester Office Sustainability and Tech event, follows the pioneering work of local landlord Bruntwood in establishing the landlord brand as an essential part of the Manchester office property market. Like Bruntwood, Aviva hopes businesses will grow and expand within the portfolio from first-stage startups to big-time national enterprises.
Aviva Director Giles York linked the cluster to the offer of improved amenities.
“There have been some dramatic changes in our business," York said. "You don’t just put up a building anymore. You need to provide something people want to work in, and you also need to invest more time and money to make the building sustainable long term. At our development at York Street we’re providing the new amenities and wellness agenda that tenants want, but because we have a cluster in Manchester we can do it across all our buildings. ... We want people to feel a part of that cluster and know that it will help attract the talent they need.”
The move is linked to a strategic decision to invest in five UK locations, and to disinvest elsewhere. Manchester, Birmingham, London, Cambridge and the Thames Valley will be the focus for the new investment approach.
Aviva acquired the York Street development in 2018 when it agreed to forward fund the development of Eleven York Street, Manchester, the first office-led development in the Square Half Mile historic office district in more than a decade. Aviva acquired the freehold interest in the site from Kier Property, the development arm of Kier Group. Kier Property and Aviva Investors will work in partnership to deliver the 85K SF speculative office development.
York drew a comparison with Bruntwood and its startup-to-plc flexible office offer.
“We see flexible office space as part of this wider strategy. We want to offer short-term desk space of the kind that Bruntwood has done so well, then we want to see occupiers expanding in our portfolio. That is already happening in locations like Enterprise City where we are joint venture partner.”
In October 2018 Aviva Investors scooped its biggest Manchester investment yet with a long-term funding partnership for the £1.25B St John's neighbourhood. The global asset management business of Aviva will initially commit £300M to the 1M SF Enterprise City element of the project, built on the site of the former Granada TV studios. It is intended to be one of the UK’s leading digital, media and enterprise clusters. The development has already attracted technology giant Booking.com, which will be the anchor tenant at Enterprise City, taking 220K SF at the Manchester Goods Yard buildings.
The deal added to an Aviva Manchester real estate portfolio of almost £450M.
Giles York was discussing the Manchester market as part of a panel chaired by Gowling WLG partner Michael O'Shea. Panelists included Manchester City Council leader Sir Richard Leese, Hewlett Packard Enterprise Manchester Lead Mandy Ward and CBRE Regional Innovation Lead Megan Hanney.