KKR to back £200m St Michael’s
The US Investor has formed a joint venture with Neville-owned company Relentless to deliver the much-anticipated Manchester city centre mixed-use scheme.
The joint venture is KKR’s first real estate investment in Manchester.
KKR’s investment was made through its $2.2bn second dedicated European real estate fund, KKR Real Estate Partners Europe II.
Laing O’Rourke is tipped to build the £200m scheme and construction of the commercial element of St Michael’s is expected to start before the year is out now that funding is secured.
The first phase of St Michael’s is expected to take around two years to build.
Later phases of the project, the hotel and residential elements, could begin on site in 2022.
OBI represented Relentless on the deal.
The project
St Michael’s features a 41-storey tower designed by Hodder + Partners, comprising 191 hotel rooms and 181 apartments.
The scheme, located on Jackson’s Row off Deansgate, also features around 200,000 sq ft of offices, which is to be the first element to be developed.
The first phase of development will also see the former Bootle Street City Police Headquarters and the refurbishment of the Sir Ralph Abercrombie pub.
Substantial public space will also be created, in the development of Abercrombie Square and a 20,000 sq ft roof terrace in the heart of the city.
The project was previously being brought forward by the St Michael’s Partnership, comprising Jackson’s Row Developments, Manchester City Council and Singaporean funder Rowsley.
Jackson’s Row won approval for the project in March 2018 and activated the consent earlier this year.
The first phase of St Michael’s is expected to have a build period of around two years. Credit: Revere 3D
The joint venture reaction
“St Michael’s has been challenging but with the support of KKR we are looking forward to delivering this exciting project in Manchester,” said Gary Neville, director of Relentless.
“The team has worked throughout lockdown to bring this project forward. The Relentless team welcomes KKR to Manchester and can’t wait to deliver what we know will be an exceptional space for our city.”
Charles Tutt, Head of UK Real Estate at KKR, said: “This is a unique regeneration project in a vibrant city. We have worked very closely with Relentless and the project team to get to this point and we look forward to delivering this exceptional development for the benefit of Manchester as businesses seek high-quality office space to meet their ever-evolving needs.”
Anthony Kilbride, chief executive of Relentless, said: “This moment is a catalyst to get the project on-site by the end of this year. The Relentless team and KKR have already done a lot of the groundwork needed to enable us to move the project forward quickly. Our teams are aligned on the vision to deliver a world-class sustainable commercial space and new public realm in the city and will be working on the final stages of design in the coming months.”
What the council said
Sir Richard Leese, leader of Manchester City Council, said: “Navigating the complexities of this development within the constraints of the site has undoubtedly been challenging, but we know the outcome is going to be truly transformational for this part of the city centre.
“This type of investment is the precise antidote we need in the city to balance the economic impact of the last year.”
Joanne Roney, chief executive of Manchester City Council, said: “Manchester is a city of ambition, and we expect that same energy from our developers. St Michael’s is oozing ambition and this is the sort of development that cities crave and the sort of investment that is vital to our swift economic recovery following the pandemic.”
