Moda director Johnny Caddick said there is “still plenty of capacity” in Manchester’s residential market as he confirmed the developer is looking at new sites, after Deloitte’s Crane Survey pointed to “unprecedented levels” of construction in the city.
Caddick said Moda was “keen to look at sites all across the city” and was in discussions with “a number of landowners” about bringing forward potential projects to complement Angel Gardens, its £154m build-to-rent development, which features 466 homes. He added the firm was “looking at two or three sites very closely”.
Deloitte’s Crane Survey revealed there were more than 11,000 units under construction in Manchester, raising questions of a potential oversupply, but Caddick said these would be delivered over a number of years and that demand for build-to-rent apartments was still buoyant.
“Our product is four-star-plus and high-quality, and we feel there’s room in that space,” he said.
“Everyone has to find a differentiator and we believe the capacity is there. If you think about a lot of the stock that was delivered in the early noughties, a lot of those are showing their age. There’s room in the city to deliver a mix of tenures, complemented by associated commercial space.”
Carillion was the main contractor on Moda’s Angel Gardens project before its collapse earlier this month, and Caddick said his company had begun contingency planning last summer when the contractor saw its share price tumble.
“We were in constant dialogue with our supply chain, and although we didn’t anticipate liquidation, we had agreed how to deal with what happened within two hours,” he said.
Moda’s sister company Caddick Construction has now stepped in to finish the 35-storey project and the group said it did not expect any material impact on the scheme’s cost or delivery timeframe. Caddick Construction has also taken on 20 Carillion staff to work on the project.
“The key for us is retaining the staff, and we have a great team on site,” he said. “We had around 86 staff working on the project yesterday.”
“We’ve had terrific support from our funders who completely understood the situation. We were one of the lucky ones, and I think clients will be looking more closely at contractors’ balance sheets going forwards because of what’s happened.”
Angel Gardens is one of the projects that featured in Deloitte’s Crane Survey, which pointed to around 5,000 residential units being delivered this year, followed by a further 4,000 next year. Approximately 20,700 units have planning permission in central Manchester and Salford.
Presenting the results at an event on Tuesday, Deloitte partner John Cooper said there were nearly 6,500 private rented flats under construction, and around 2,500 homes for sale being built across the city.
He added there was “significant pent-up demand” in the city and pointed to a slump in residential delivery following the recession, leaving room for more projects to get under way.
Greater Manchester Chief Executive Eamon Boylan, speaking at the event, said the GMCA remained “wholly pro-growth” and would “continue to work towards bringing investment to the city”, although he warned that private investment decisions were taking longer due to “ongoing uncertainty”.
“The time it takes to sign off [private] investment has grown from around 170 days to around a year,” he said. “But it’s important to say the demand for investment is still there; it’s just taking longer.”