Nick Leslau, chairman of Prestbury Group and one of the U.K.'s most ebullient property moguls, is back in the Manchester real estate market after a £436M portfolio buy which includes the Manchester Arena.
Leslau and Manchester go back a long way. In the 1990s his Manchester-based vehicle Knutsford was a stock market darling. Leslau businesses such as Burford and Max Property were regular features of the Manchester market — but have largely been absent since the end of the recession, when Manchester property values began to soar.
Burford was behind the development proposals to build a Piccadilly Circus-style Trocadero leisure complex at Shudehill, was linked to bids for the Great Northern leisure complex, and was an early owner of the 1.4M SF Heywood Distribution Park (paying £24.4M in 1994).
Max Property acquired the 125K SF Concord Business Park, South Manchester, in 2010.
Leslau has often been the first to call the top of the market — and the first to call the bottom, founding Max Property in 2009 at the real estate sector's lowest ebb. He sold it to Blackstone in 2014 for £448M, cashing in two years of schedule to take advantage of a peaky market.
So the question is: Does Leslau's return to Manchester mean he thinks the city is going up, stable or going down? Or do Manchester's fortunes not figure at all in what is really a leisure sector play?
Recently Leslau has sounded a gloomy note, describing the property market as "constipated."
"I am thankful that the market is not burdened with high debt levels and that much of the equity deployed in the past five years is very sticky, but when sentiment goes it does so pretty quickly. There will be no crash, but the rate of decline for all but the best real estate will increase," he wrote in Estates Gazette.
Whilst the arena purchase was part of a portfolio, it remains true that some large investors — among them M7 Real Estate — have explicitly stated that they regarded Manchester as a hedge against Brexit instabilities.
The latest arena deal, which comes 10 months after a terrorist attack on the arena which cost 23 lives, sees Mansford offload the arena — along with a portfolio of hotels and other leisure assets — five years after they bought it for about £82M.
It is estimated that Mansford could make around £52M from the sale, the Manchester Evening News reports.
The 21,000 capacity arena is let for 27 years to SMG with a rent of £5.75M a year, due for review in June. It also comes with 160K SF of office space with tenants including the city council and Serco.
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