Landsec ‘hopeful’ of start on Mayfield offices this year
Chief executive Mark Allan said talks were progressing with partners at the central Manchester mixed-use development with construction of the first phase – office buildings and a car park – expected to begin before the end of 2024.
Speaking on a results call this morning to accompany Landsec’s annual results, Allan highlighted Mayfield in the group’s immediate development pipeline.
There is detailed planning consent for 320,000 sq ft of offices and a multistorey car park in phase one of Mayfield, near Piccadilly station.
Landsec had hoped to start on site in 2023, but that failed to materialise. The developer acquired the site as part of its takeover of U+I in late 2021.
Allan said the Manchester market suffered from severely constrained supply of new offices and was the sort of environment he wanted to deliver product into. Talks with contractors were ongoing and he was “hopeful” of a start this year.
Development pipeline details for Mayfield. Credit: Landsec
The total development cost of Mayfield was put at £900m over its 24 acres, set to contain 2.5m sq ft of commercial space and 1,500 homes. New buildings are expected to start completing in 2027.
Since taking over as chief executive of Landsec in April 2020, Allan, formerly chief executive of St Modwen and Unite, has overseen a disposal programme to pay off debt, raise a £1bn development and investment pot and focus on best-in-class assets. The business has sold £3.1bn of assets out of the £4bn target. The £1bn finance pot will be split £400m for development and £600m for retail investment. Allan said values had stabilised and there was a “trough” of investment opportunities around the UK from which to feed.
Rents in the prime retail assets Landsec owns, including Leeds Trinity, have started to rise again and occupancy in retail and office remains strong.
Landsec is also in a joint venture with Peel Land to develop phase two of MediaCity in Salford, although there was no update in today’s results.
Mark Allan, chief executive of Landsec, said in a statement to the stockmarket: “Following a reset of values over the past two years driven by rising interest rates, the stabilisation in rates and evidence of continued rental growth is starting to attract increased investor interest for the best assets. Around 60% of our portfolio already showed stable values in the second half and overall yields were largely stable in the final quarter, pointing to a positive outlook for our overall return on equity.”
Landsec reported a loss before tax of £341m in the year to April, reflecting a £625m or -6.0% slide in portfolio valuation. The value decline was mainly in the first half of the financial year, with 60% of the portfolio effectively stable in value in the second half, the company said.
Shares in Landsec were down 11.5p to 678.5p in early trading on Friday.
Good news. It’s vital that any development at Mayfield addresses the barrier created by the Mancunian Way. I’m hoping to see proposals (probably alongside MCC) to soften the road and introduce more pedestrian-friendly measures such as wider pavements and crossing points to tie the area into Ardwick. There will be little benefit of this to the wider community if it is treated like an island.
By Anonymous
My goodness, only the heat death of the universe or the proposal for Piccadilly Gardens has consumed more time than this. I shall ejaculate a loud Hurrah! When they lay the first brick. I do hope it’s soon…it’s sometime since I…well anyway just get on with it Landsec and give us all a happy ending.
By Nimrod
Totally agree with above poster connecting it well with ardwick is a must for future growth potential
By Anonymous
“hopeful” does not sound promising, I doubt this will start this year.
By Anonymous
Would honestly prefer if they just expanded the park
By Anonymous
The Council need to intervene here and get rid of LandSec and U&I. There is zero commitment to do anything when the city is in desperate need of new build high spec offices and a continued supply of homes.
By Malcolm
Have to say I’m less than impressed…this development has had so many false starts I’m beginning to believe it will never happen. Just get on with it, we get things done in Manchester. If they can’t deliver, give it to someone else who can.
By Manc Man
Manc man there’s so much empty office space in Manchester why would you expect this to go ahead?
By Anonymous
Anonymous 6.54 Dan, well thats why cities are developed by investors and professionals not keyboard warriors who like to push their particular ‘thing’ .
By Cal Smate
Building empty offices is completely wasteful, it takes up land and is bad for the environment, pointless
By Anonymous
Mayfield started many years as a proposal for a possible civil service hub when relocations to Manchester were first mooted. Now we are getting an actual approved Civil Service hub in Ancoats , another relocation to First St and the HMRC office at New Bailey all before Mayfield ever laid a brick.
By Anonymous
Well I suppose you could not build offices or apartments or anything really…some people love wittering on a Development site about the pointlessness of development…if they didn’t exist you’d have to invent them 🙄
By Dan the man
Anonymous 9.45 ??? How would you build full offices? They have to exist before you can fill em, it’s called development and you are on the wrong site if you don’t get that.
By Anonymous
Anon @5.28 you don’t know how it works, when a market is struggling you wait for a pre-let, these offices will not be built without one, it’ll be tough as there are many buildings empty at noma, spinning fields, York street, lincoln square, embankment and more
By Anonymous
I am confused by this article – which lets be honest is less journalism and largely printing a press release. The word “hopeful” is doing a lot of heavy lifting within this proposition. What we want is physical delivery on site. By all means – do a press release to tell us all that a building contract has been let. But what is the purpose of doing a press release saying that you are hoping that some circumstances will arise which if they do might be quite good. I am “hopeful” that I might win the lottery and get a dark green Aston Martin. So what ?
By Mancunian
Hi Mancunian – this was not from a press release, as the story states information was gathered from the stock exchange report and a call that was done after the announcement. I understand your frustration on the project though. We felt this update, while not as definitive as development fans may want, was worth bringing to the attention of readers who may be curious if anything was happening. Thanks for reading.
By Julia Hatmaker
The doubters are the same doubters who said co-op live didn’t have good transport links, yet everybody who went to co-op live got home by public transport and on-time
By Anonymous