MIPIM | Five minutes with Landsec CEO Mark Allan

The UK’s biggest propco has piled into the North West in a big way in recent years, investing more than £1bn to acquire MediaCity, Mayfield, and Liverpool ONE. Place North West caught up with the firm’s chief executive, who was attending his first MIPIM since 2017.

MediaCity

Landsec took full control of the 54-acre Salford mixed-use destination last year, buying the final 25% from Peel having already purchased 75% in 2021.

“What we liked about MediaCity is that it is fabulous example of regeneration from the previous decade,” said Mark Allan.

In the four years since acquiring the site, little progress has been made on delivering the next wave of projects. Allan puts this down to the economic volatility of recent years.

“We liked what had already been established and the potential to be part of taking that on further.  We have now got to full control and all of the things that we felt about MediaCIty back in 2021 are still the same.”

Shifting market demands mean the make-up of the next phase, which has permission for 3,200 more homes and an additional 800,000 sq ft of commercial space, is still up in the air, according to Allan.

“I’m not entirely sure what that final mix will be. I do feel there’s an opportunity to blend the media the creative sectors with more leisure and attractions as well as living within that,” he said.

Mayfield

Landsec acquired developer U+I and, as a result, the £1bn Mayfield scheme, at a similar time to the MediaCity deal and has been frustrated by a lack of progress given the aforementioned economic upheaval of recent years.

However, Allan is philosophical about being unable to get spades in the ground on the first phase – two large office buildings – and is confident the plan remains the right one.

“If we’d have progressed with a scheme based on the 2021 view of the world I think we’d be delivering into a world where that would have been a loss-making scheme for us and created challenges for future phases,” he said.

“Clearly the market since 2021 in terms of interest rates and everything else has moved on [but] I don’t think the demand for great quality living and office space in central Manchester has changed.”

Living sector

Last month, Landsec announced its intention to rebalance its portfolio and increase its exposure to the living sector. The plan is for shopping centres, commercial offices, and residential to each make up a third of its portfolio over the coming years.

Landsec, best known as a commercial landlord, is seeking to build a £2bn living portfolio by 2030. This will comprise assets within its existing pipeline, including around 900 at Mayfield, as well as the acquisition of existing residential schemes.

Growing its presence in the North West appears to be on the agenda.

“What we’re looking for in terms of cities is what we see as being the key ingredients of economic growth locally for the long term,” he said.

“Manchester and Greater Manchester would absolutely fit the bill.”

The ingredients Landsec looks for include a strong graduate retention rate, a global brand, and stable political leadership, he said.

“Those things were important to us in 2021 and they’re important to us today.”

He is encouraged by the improving economic climate following recent interest rate cuts and buoyed further by positive noises from government around planning reform and growth.

“I do think now the UK, in an international context, is one of the more politically stable environments in some in some ways,” he said.

However, he conceded that is “a low bar” and warned that it could take some time for the government’s plan of attack to have an impact on development on the ground.

“I think we’re starting to see building blocks but those are three-year things, not three-month things. It takes time for those changes to happen.”

Liverpool ONE

Landsec’s most recent North West acquisition is that of Liverpool ONE, which had been a target for some time.

The centre is in the top 1% of retail centres nationally that command a third of all UK retail spending, Allan said.

Having secured the 1.6m sq ft shopping complex for £490m just before Christmas, Landsec has no concrete plans to make any drastic changes.

“It is not a situation where, and there could be other examples elsewhere in the UK, an asset has been heavily under invested in because it has been in the hands of people who are not long-term owners. Liverpool ONE is not that.”

Allan is eyeing more shopping centre acquisitions as part of a £1bn plan. £200m will be invested in its existing assets, including Liverpool ONE, with a chunky £800m earmarked for more best-in-class destinations.

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