Manchester Life grapples with viability in Ancoats
The developer has made changes to two schemes that have become unviable since planning permission was granted.
Eliza Yard and Jersey Wharf, Manchester Life developments approved in 2021 and 2022 respectively, have been reworked to get around constrained viability.
Planning documents lodged with Manchester City Council demonstrate how far development appraisals have shifted in recent years as a result of economic unrest.
The cost of delivering Eliza Yard has risen 30% since approval, while the Jersey Wharf project is now 20% more expensive to deliver.
Both of the schemes, which are located on opposite sides of Jersey Street in Ancoats, were approved before Liz Truss’s mini-budget, which many claim is the root of the current inflationary environment.
At Eliza Yard, an eight-storey scheme, commercial and resident amenity space have been scaled back in favour of an extra eight apartments. This will take the number of homes within the scheme from 118 to 126.
A planning statement prepared by Deloitte states that the consented scheme is “unviable and undeliverable”.
“Macro-economic and inflationary pressures have given rise to a 30% uplift in the cost to deliver Eliza Yard from the tender price received in December 2021”.
Balconies have also been removed, while the overall height of the building has been reduced.
It is a similar story at Jersey Wharf, although here there is no change in the overall number of homes, which remains 190.
Rather, the number of one-bed flats has increased from 50 to 57 while the number of two-bed homes has gone from 128 to 122.
A statement prepared by Deloitte states that Manchester Life held off entering into a construction contract due to delays to the neighbouring Ancoats Mobility Hub project.
It’s not that they’re not viable, it’s more that the developer has certain expectations for the size of their return and are likely poor at managing supply chain efficiently. Plenty of other developers can make similar schemes stack up without removing balconies etc and Mcr Life even get subsidised land land thrown into the bargain. My reading is that they’re simply trying to push MCC into lowering their standards to maximise their return.
This should be thrown out.
By Anonymous
Come on John W how much housing has been built in Manchester in the last 5 years? Well its more than every other regional city. That’s a left wing administration working constructively with the private sector……..so whio is the loony?
By Rubbish
“Balconies have also been removed” …
Oh oh 😉
By MrP
This is ridiculous. Manchester has had little affordable housing, if not viable then wait till the market makes it so, 2 years max. Dont be taken for a ride.
By Henry
What!! Balconies removed!
Worst possible decision.
By Balcony Monitor
ALL developments should have balconies if meant for humans.
By Gilly
What an absolute farce. Greedy developers penny pinching again when we could have had a scheme which delivered a great living environment for residents. Bring back the balconies!
By Balcony Warrior
I agree with Henry here – when it got consent, it was already MCC letting its own JV off having to comply with its own Affordable Housing policy. And now the stuff they offered up as mitigation is going, including presumably the dubious workspace for local artisans.
Given housing demand in Mcr won’t be going down anytime soon, why can’t they wait?
Also, the sophisticated high tech machine Deloitte uses to assess viability perhaps needs new batteries, as the dial seems to always be stuck on “no affordable housing”…
By Rotringer
Comments to date are inaccurate
However popular The Northern Quarter and Ancoats are there are several empty sites also in The N Q which are unable to be developed on viability grounds
By Harry
Exactly Harry, it’s more like the car park quarter
By DH
Sorry Harry – if there are sites in the NQ that can’t viably be developed for resi, its not because of remediation costs to deal with toxic asbestos pits or the like, unless landowners are being very shifty. What are these obstacles?
If it involves preserving something actually historic (which MCC tends not to be that bothered about) then they should say so.
By Rotringer
When you make the regs more stringent all the time, and you have an over the top regulatory response to Grenfell, and you tell kids that university is the only way so there is a colossal skills shortage, and then you look after everyone in your country that isn’t from your country more than you look after those that are, along with an ongoing deficit, appalling national debt, and feelings ruling over facts, the house of cards starts to wobble – and here we are….
By Daz
Henry, if there’s been a Homes England and/or Brownfield grant allocation, which it is time limited, the developer can’t wait a couple of years because they will lose the funding.
By Anonymous
If only everybody else had such an easy ride. One rule for one another for themselves
By Dave B
And how much have rents, and purchase prices if any homes are for sale, gone up (and will continue to go up during the builds). This all seems a bit lame. Silly not to raise the increased value question if the story is that the build cost is up.
By Chris P
Easy ride……..more keyboard analysis. Read the viability appraisal which is a public document. If it is wrong or you can do better call it out! It is so easy to come on here and throw stones. If you can prove that there are dual standards you should prove it as that should be exposed. The info is at your fingertips. Lazy lazy lazy
By Easy ride
Daz, not sure what the inaccurate and uninformed rant about immigration has got to do with property development. Please clarify.
What we are talking about is the fairness (or otherwise) for the layers of subsidy MCC are being asked to provide to the developer Manchester Life in return for reduced standards / specification.
By Anonymous
So they are still being built with modifications and next to a mobility hub. Would that every city had such ‘problems’’ 🙄
By Anonymous
I thought that all housing had to provide. Certain percentage of social housing but seems to have been forgotten once planning permission was obtained
By Chris