Stalled Salford Quays site has ‘nil value’
Administrators acting for the SPV that controls one of four buildings within Fortis Group’s 900-home residential cluster say the site is worthless and are exploring options to claw back £4.4m owed to investors.
Begbies Traynor – administrator for Furness Quay Phase 1 Ltd – is looking into ways it can remove 43 investor leases to unencumber the site and make it a more attractive prospect to potential purchasers.
In 2017, investors paid 50% deposits on apartments in the proposed 44-flat scheme, totalling £4.4m. More than five years on no work has taken place.
The leases attached the development are proving to be an obstacle to administrators as they attempt to sell the site to claw back money for the investors.
Several developers have expressed an initial interest in the site. However, none engaged in further discussions once the lease situation was explained to them , according to the latest administrators’ report.
The report on the demise of Furness Quay Phase 1 Ltd states that there is “no precedent” for dealing with this kind of lease situation.
The administrators’ ultimate aim is to extinguish the existing leases so that the freehold of the site can be sold, a distribution can be made to creditors, and the plot can be redeveloped, the report states.
There are different ways that this can be achieved. One way is by getting each investor to voluntarily surrender their lease. However, administrators concede this is unlikely to happen.
Another option is to go down the disclaimer route. This is explained in more detail in the report.
Fortis had initially planned to strip back the former Custom House, located on the site, to its concrete core and use that as the skeleton for the apartment project.
However, it later transpired that reusing the core of Custom House would make the scheme unviable, which prompted Fortis to rework its proposals.
The company lodged a revised application to knock down Custom House completely and build a 158-apartment, 20-storey new-build block known as Herreshoff, which was recently rebranded as Mariners Wharf.
A similar approach was taken at the neighbouring Furness House, which Fortis had also planned to strip back and convert. This element of the scheme would be known as Victoria Quay and comprise 178 flats.
Following the change of approach, Fortis sought to reach a compromise arrangement with the leaseholders in the Custom House scheme – now Mariners Wharf – according to administrators.
This involved asking investors to convert their deposits into loans, an offer that they refused.
In addition, investors were at one point offered repayment of 40p in the pound. This was also rejected.
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Analysis - Commentary
Salford’s next chapter: how the Strategic Regeneration Forum is driving inclusive growth
With the launch of the Salford Strategic Regeneration Forum at MIPIM 2025, the city is taking a bold new step towards delivering sustainable, inclusive growth beyond the city centre, writes Cllr Jack Youd, Salford’s Deputy City Mayor.
What is becoming of this city?
By Gilly
Gilly – The city has transformed spectacularly over the last 15 years. What’s becoming of Manchester? A city which is attracting global companies to open offices here, attracting investors with better returns than London, overtaking B’ham as England’s 2nd city. Yes there have been hiccups along the way but IMO the city is so much better than it was when I was young.
By Hamza
@Gilly, re “What is becoming of this city?”.
Answer: It’s growing. Cities do this all the time. At one point in history, it was countryside, then a village, then a town, then a city and it’s still growing.
That means new buildings. New infrastructure.
Just like every other city on the planet.
Well… nearly every city. If you want a museum, Venice is a good option.
By Jo
@Hamza absolutely spot on. Manchester has now also got to the point where it’s success is just becoming a snowball effect and bar a disaster it will just keep attracting more and more jobs, investment and talent. Long may it continue.
By Bob
Well, what would you expect a city to do Gilly? If it’s badly run it attracts little investment, gets no government funded projects, brings no jobs or infrastructure and becomes something of an anachronism. We all know places like that though don’t we? We just don’t want to be one.
By Jilly
The site would not be worthless if something of ambition was there instead. Maybe 80 stories?
By Giant Skyscraper Fan