Far East Consortium directors Gavin Taylor and Tom Fenton have outlined the group’s ambitions to deliver their first UK hotels outside London, alongside being in the market to buy a car park portfolio worth as much as £500m.
The Hong Kong-headquartered, multi-national company has already made its first foray into Manchester with MeadowSide, a £200m residential development, and has also been named Manchester City Council’s partner to bring forward the £1bn Northern Gateway, which will provide more than 10,000 homes.
Taylor said the company was focussing on a number of different areas for its next project, including more residential, property portfolios, multi-modal transport interchanges and hotels.
He revealed FEC had come second in a bid for the Macquarie European Infrastructure Fund’s 100% stake in car park operator NCP, losing out to Japanese consortium Park24, but added the company was looking at further acquisitions of equal size in car parking real estate, eyeing deals of between £400m to £500m.
Another key area for the developer and investor is hotels; the company operates its five-star Dorsett brand at two sites in London, but is casting its eyes further north to bring the brand to other major cities.
“We want a hotel in every major city in the UK, but whether we do that new-build or through acquiring existing portfolios, we’re not sure,” said Taylor.
“We are looking at some portfolios but the market being the market, it’s quite hot, so the opportunity to add value there isn’t significant.
“That being said, we can definitely see something in gearing some of these hotel operations to an Asian product. If you look at Manchester, for example, there isn’t a four or five-star offering that’s geared towards East Asia – in fact, there isn’t a four-or-five star product that’s geared full stop.”
Two sites in Manchester are currently earmarked for a five-star hotel: St Michael’s; and the Renaissance strategic regeneration framework area on Deansgate. Taylor also confirmed the developer had been looking at other cities in the North for its hotel offering, including Liverpool.
Taylor also highlighted transport interchanges as one of the developer’s key areas of interest, and said the company would “love to be involved” in the plans in and around Manchester’s Piccadilly station.
“If you look at some of the projects we’ve delivered in China, it’s all focussed on light rail, with a level of retail and residential above it, with car parking alongside, which ticks a number of boxes for us, and if you throw a hotel in there, there are synergy opportunities,” he said.
“We’re not interested in doing the civils; as a core business we wouldn’t touch that but we would possibly joint venture with another party.”
Residential opportunities are also on the radar for the company, and Taylor said FEC would “love to do a Northern Gateway equivalent in Liverpool”.
FEC outlined its plans for Manchester’s £1bn Northern Gateway at MIPIM, and Fenton said there could be opportunities to replicate that model in other cities.
MeadowSide is also progressing at pace, with five contractors shortlisted for the first phase of the £200m project.
Fenton said the group hopes to have a show home constructed on the site by the summer to showcase the potential development to owner-occupiers.
“There is definitely demand for owner-occupiers within the city centre; Scarborough have shown that by what they’re doing at Middlewood Locks in Salford,” he said.
“They have a product that’s almost ready, and at that point you can get owner-occupiers through the door, it’s tangible, and they can make decisions in the next six months.
“When we’re so far out, it’s difficult to get owner-occupiers to commit realistically at this stage as completion is two years away; they might not know their circumstances in two years’ time.
“That’s the problem with development and particularly at the scale we operate at; there’s a huge amount of upfront investment and risk before you even start to see people committing.
“The Northern Gateway is a good thing for us insofar as we can split things down into different developments and minimise risk.”
Taylor concluded: “We realise we need to grow sustainably, and we can’t just go and make false promises that we’re going to come and save the day. That’s why it’s about strategic deals rather than one-off transactions.”