125 Deansgate

BT’s Manchester office to secure £12m loan

Charlie Schouten and Jessica Middleton-Pugh

The Greater Manchester Combined Authority is set to sign off a loan to Worthington Properties to fund the fit-out of the 116,000 sq ft office in Manchester, due to be managed by Spaces on behalf of BT.

The GMCA has been recommended to agree a £6m loan at its meeting on Friday, with the remainder coming from the North West Evergreen Fund. This mezzanine loan facility will support the fit-out works for Spaces, which was revealed to be taking the whole building by Place North West in April this year.

Spaces subsequently agreed a deal with BT to manage the whole building on behalf of the telecoms provider, a move again tipped by Place this summer. This is on a three-year managed contract for BT, which has a longer-running requirement for between 150,000 sq ft and 200,000 sq ft.

Last year, fellow co-working operator WeWork was tipped to take 45,000 sq ft, but negotiations stalled during the Christmas period.

There is also 11,000 sq ft of retail space on the ground floor; the building is set to complete next year.

The agents for 125 Deansgate are Savills and Knight Frank, with Cheetham & Mortimer on the retail element. The shell-and-core of the building has now been completed by Worthington’s in-house contractor.

The GMCA’s loan is due to be agreed on Friday 27 September; this will be to Worthington Mancap, an LLP made up of Deansgate Investments, a Worthington special purpose vehicle; and KH III Properties 609, a company based in Jersey. Russell Worthington is listed as having significant control over the LLP on Companies House.

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If the banks won’t lend why should the state ?

Manchester has a booming service economy, and if a scheme like this can’t look after itself then what’s the point in promoting it ?

By Tannoy

Are there not better/more worthy things to invest in?

By Busby

Is there any particular reason why this fitout should be funded by GM tax payers . Particularly as the developer is based in Jersey to avoid paying tax .

By Graham wilson

@Tannoy, how do you know the banks won’t lend?
This loan probably offers a more favourable rate than a commercial lender but this benefits the state as we get the interest. Plus the jobs that this is bringing with it. It’s a no-brainer!

By Bill

?? Not enough money to fit out the building?

By Anonymous

This is outrageous!! Why is the tax payer funding a private builder to make them profit???

By What??

Great to see GM Tax payers funds being well spent. In any event who needs public amenity and services when you can fund a developers fit out .

By Ike Mingall

Am I the only person who understands what a loan is???/

By Bill

Cannot understand why a Major FTSE business requires a loan from GM Authority.
This is meant to be free market capitalism and either the developer and in going tenant can make it work or it cannot. Why does BY need a loan ? Either it can afford to move from its own cash resources and day to day funding or it cannot.

Something more going on methinks….

By A Developer

Loan: .a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.

By Sir

This is a loan, not ‘funded by GM taxpers’ @ Graham Wilson.

By Kenny Orpin

@ Bill I don’t think people understand the idea of using investment to get a return to spend on local needs without increasing local taxes or reducing reserves!

By Anonymous

Any comment from Liverpool’s authorities, as to whether they’ve made themselves party to any similar discussions in order to at least try and save the jobs of the 1000+ people working there, given this likely represents the first step in NW consolidation and the Liverpool office being closed?

By Mike

I am not sure why people are objecting this is a loan which will be paid back with interest it sounded like a great investment to me.

By Lenny1968

I thought that these loans were paid back with interest? Isn’t one of the reasons why Manchester City centre has more cranes in it than anywhere else is due to this method? I think that this is a very clever idea.

By Elephant