Mayfield developer reports punchy results
U+I has recorded the strongest year of trading since its formation, making £68.3m of development and trading gains in a year that has seen the value of the Mayfield project in Manchester climb from £850m to £1.1bn.
The business, formed in 2014 through the merger of Development Securities and Cathedral Group, reported a profit before tax of £48.2m, mostly fuelled by major sales in London and Brighton.
In his chief executive’s statement, Matthew Weiner said: “We mainly operate in the dynamic markets of the London city region – within one hour’s commute from London – Manchester and Dublin. These places share certain characteristics.
“Demand is strong and growing; there is an urgent, unmet need for new homes and mixed-use spaces that will stimulate local economies; and supply is constrained by political impasse or a lack of expertise. We also feel these areas will be less impacted by the ultimate conclusion of the Brexit process.”
U+I launched its Manchester office in October last year, with ex-Argent man James Heather in place as development director. Activity around Mayfield has picked up significantly over the last year, with a draft Strategic Regeneration Framework published in February, alongside a public consultation into the make-up of the 26-acre site, an exercise the group said had been positive.
The broad intention is for the main historic buildings to be retained, with a cluster of commercial buildings within that part of the site, a 6.5-acre city park by the River Medlock, and residential towers to the eastern end.
Deputy chief executive Richard Upton said of the group’s target areas: “The developable land is there, as are the unused buildings, steeped in history and tradition. But we need to unlock their potential through exciting, inspirational mixed-use spaces, created in partnerships and secured through trust, hard work, creativity and passion.”
He said that the power of this approach is exemplified at Preston Barracks in Brighton, a former MoD site where planning consent was secured this year. The subsequent £11m sale of the 500-bed student accommodation element has enabled this £200m scheme to start on site.
Weiner concluded: “Stepping back to look at our market, our strategy is such that we will continue to benefit from the long-term socio-political trends driving the need for mixed-use regeneration. The longstanding relationships we have nurtured have made us a public sector partner of choice, often giving us unique access to major Public Private Partnership opportunities.
“These results are an endorsement of the ambition that we set ourselves when we established U+I: to create a strong business with a clear focus on regeneration and a commitment to delivering sustainable value for shareholders and the communities in which we operate.”
A dividend of 17.9 pence per share, a 106% increase year-on-year, was declared.