Manchester site back on market after sale falls through
Issues around rights of light kiboshed a deal for a site on Red Lion Street, prompting the administrators behind the stalled 38-apartment Northern Quarter scheme to look for another buyer.
An SPV of developer EGCC Group had been close to acquiring the long-stalled scheme out of administration having paid a 5% deposit and exchanged contracts on the site with administrator Mazars last year.
However, the company has now decided not to go through with the purchase after carrying out additional due diligence around rights of light.
A report sent to Place North West by EGCC Group states that the developer would have to set aside £1.7m to pay off residents whose right to light might be impacted by the construction of the scheme.
EGCC calculated that its total exposure due to the rights of light risk could be as high as £2.3m once insurance premiums and excesses have been taken into account.
For this reason, the company decided the scheme was not viable and walked away from the purchase.
The right of light risk has impacted the value of the land, according to a valuation report EGCC shared with Place that states the site is worth £380,000.
This figure is more than £1m lower than the £1.45m Savills – instructed by administrator Mazars to sell the site after the EGCC deal fell through – is seeking.
The valuation report estimates the build cost at just under £7m and the GDV at £13.1m.
The plot is due to go under the hammer next Wednesday.
Savills and Mazars declined to comment when approached by Place North West.
It has been seven years since plans for the redevelopment of the plot were approved.
Union Square Limited, the SPV set up to deliver the project, ran into trouble in 2021 and ultimately appointed Mazars as administrators.
Mazars then appointed Landwood Group to find a buyer for the Red Lion Street scheme, a project that stalled despite 37 of its 38 flats being sold off-plan.
Opposite the Abel Heywood pub on Red Lion Street, the build only reached basement level before running into difficulties.
Will this site be viable at all if the right to light costs will be £2.3m and building cost being £7m. It’s looks like an eyesore at the moment.
By Anonymous
Proper dump round there
By Dan
The issue with the northern quarter is for various reasons with different sites development is delayed or doesn’t happen leading to the area looking scruffy in parts. I love character but there is a massive difference Thomas Street with the weavers cottages listed status is another example of years of delays
By Tomo
Maybe it’s appropriate to consider either using the land for something else, at one storey, or even a park / public space? The price of the land is not that extraordinary relative to other places in the city. Perhaps the council should step in, or a crowd funding exercise take place?
By Simon / Not Quite Light
This building needs redeveloping and Union Street opening up again. it is a complete disgrace how the rights of light issue has become so significant. This is a central position with various other high rises opposite. The council have really screwed the situaton up
By Anonymous