Landsec waiting for opportune time to pull trigger on Mayfield 

Since acquiring a 50% stake in the 24-acre Manchester scheme two years ago, economic headwinds have made delivering large-scale regeneration projects tricky. However, the developer is hopeful of a start on site in the first half of 2024, “if conditions are supportive”. 

Landsec, which bought U+I for £190m in November 2021 and agreed to fund the £400m first phase of Mayfield, had previously said work would begin in 2023. 

Chief executive Mark Allan said the project is still “broadly on track” after securing revised planning consents for the first three elements of the project – two offices totalling 320,000 sq ft, and a multistorey car park. 

However, he added that a contractor is yet to be appointed and that inflationary pressures were slowing the process down. 

“Clearly, we’re operating at a much higher interest rate environment,” Allan told Place North West. 

“If you’re in regional locations, where the land value is much lower, and therefore less able to absorb some of that increase in costs, then financial appraisals come under a bit more pressure.” 

He added: “I’m still expecting us to be proceeding with [the project] but it would be prudent for us to make sure that the market conditions we were expecting to prevail are indeed the ones that are there.  

“We’ve got to make sure we’re confident in our predictions when we progress that capital.” 

Elsewhere in the North West, rumours that Landsec is in talks to acquire the majority stake in Liverpool ONE have been circulating in recent months. 

Allan refused to be drawn on rumours linking Landsec with the majority stake in Liverpool ONE. Credit: via Aver PR

During a briefing call this morning [Tuesday], Allan was enthusiastic about the prospects of “best-in-class” retail assets but refused to be drawn on Landsec’s reported interest in Liverpool ONE. 

Having seen retail rents increase after a sustained period of decline post-pandemic, he suggested Liverpool ONE would not look out of place in Landsec’s shopping centre portfolio alongside Bluewater in Kent, Westgate in Oxford, and St Davids in Cardiff.

“Liverpool ONE, I would say, is a world-class asset. Those prime catchment dominant centres all show very clearly that brands are migrating into that best-in-class space. I think they have a have a very bright future.

“[Our] liquidity, plus the conservative balance sheet position, does give us the capacity to pursue new opportunities. What we want to be doing is investing in scarce assets at great prices, and we think those opportunities will be there.” 

Landsec today reported a £193m pre-tax loss for the six months ended 30 September 2023, citing a £375m or -3.6% adjustment in portfolio value.