Allied London chief executive Mike Ingall told delegates at Mipim his next building will be a seven-storey, 160,000 sq ft office block on Hardman Boulevard aimed at telecoms, media and technology tenants.
In a candid presentation on the Manchester stand on Tuesday, Ingall said he was 'perplexed as to what to do next' at Spinningfields, following the market crash in 2008, the same year in which the last building was finished there.
For the i+ concept, Ingall said he revisited ideas from the industrial revolution when manufacturers rather than developers dictated terms for cotton and textile mills in Manchester. He said Spinningfields and the wider city centre had to make itself fit for the today's technical revolution. There might never be the same demand for large pre-let office buildings driven by occupiers from banking, legal and financial sectors, he warned.
"Manchester has to get a market for the TMT sector," he asserted.
He said the i+ building, opposite the rear Royal Bank of Scotland office in the River Irwell end of Spinningfields, would be built as a concrete and glass shell with tenants deciding on specification of services. The floorplates would be 22,000 sq ft and each floor would be taller than normal at four metres high to allow for bespoke data and heating systems as required. Ingall admitted he didn't know what the media and technology firms wanted in specification terms but he knew they wanted cost efficiency.
The next building will be constructed on one of the two sites that Allied London sold to Manchester City Council for £15.9m in March 2010 under a sale-and-leaseback agreement. The council granted Allied London a 250-year lease on plots at 1 and 2 Hardman Square and 2 and 3 Hardman Boulevard. The cash was to be used to help the developer maintain momentum during the downturn and also fund community and social events in Spinningfields such as Screenfields, the ice rink and pop-up markets. The agreement was that Allied would deliver two buildings, with the first completed by the end of 2011 and the second no later than the end of 2013. The total space delivered would be 580,000 sq ft of predominantly offices with some retail below. So far neither has started on site.
The development agreement expires at the end of December 2015. Ground rent paid by Allied to the council covers the cost of interest on the council's borrowing for the investment.
- Report to March 2010 executive of Manchester City Council regarding Spinningfields development agreement
Public transport links are essential to the TMT offer – the new office will be 400 metres from Salford Central Station, which will become far busier in the coming years once the Ordsall link between Victoria and Piccadilly stations is opened.
Ingall said quoting rents for i+ would start at £14/sq ft for the concrete shell, rising according to specification. Even with the highest fit-out the rent should be no more than 70% of current prime rental, he added.
"The tenant decides what he pays because he decides the services."
Ingall said funding was in place for the £14m building and construction would start on site in early 2013 on a 12-month build.