Starwood, PAG unveil £200m Renaissance plans
A joint venture between developer Property Alliance Group and investor Starwood Capital Group has acquired the 1970s Manchester hotel and intends to redevelop it into a mixed-use scheme with offices, homes and a new hotel.
A controlled affiliate of Starwood, through the JV with PAG, scooped up the long leasehold of the Renaissance site on Deansgate from developer Urban & Civic for an undisclosed sum, the Florida-headquartered private investment firm said. Manchester City Council retains the site’s freehold. The companies declined to reveal their split of JV interests.
Starwood Capital, headed by Barry Sternlicht, focuses on real estate and energy investments and has around £60bn of assets under management. Among its past hotel assets were the Principal portfolio – 14 assets including the Principal Manchester on Oxford Road, since renamed the Kimpton Clocktower – which it sold to Intercontinental Hotels Group for £858m in 2018, and the Holiday Inn Express in Manchester city centre.
The acquisition of the Renaissance with PAG marks a return to the city for Starwood and the two companies hope to work together on other projects across the Northern Powerhouse region in the future.
Located on Deansgate and next to Harvey Nichols, Selfridges and Manchester Cathedral, the city centre Renaissance site houses a 206-bedroom hotel, a car park and an office building.
The JV is now drawing up plans to redevelop the site into a £200m mixed-use scheme featuring a hotel, office space, residential units and a car park, designed by Jon Matthews Architects. Further details and designs are expected to be disclosed before March, but the JV said the majority of the existing building “would be reused or repurposed”. Avison Young is the planning consultant.
The four-star Renaissance hotel, part of Marriott Group, closed permanently on 15 July 2020 citing weak demand compounded by the pandemic.
The site has long been the subject of developer interest and has been earmarked for redevelopment since 1999. Latterly, Urban & Civic appointed Glenn Howells Architects to design a masterplan encompassing the hotel and nearby area, which was approved by the council in 2018.
The masterplan outlined the potential for three towers ranging in height from 11 to 45 storeys, containing a 250-bed five-star hotel, 600 apartments, a conference centre, retail and public space.
Alex Russell, managing director of PAG, said: “We are delighted to announce the acquisition of the Renaissance Manchester site and our new partnership with Starwood Capital.
“Starwood Capital is a likeminded partner that shares our vision and commitment to deliver this development. Our complementary skillsets and combined real estate experience, including Starwood Capital’s strong hospitality track record, means we are well-positioned to deliver a landmark scheme that will regenerate a key part of Manchester.”
He added: “We will now be working closely with Manchester City Council to develop our plans with the aim of presenting these over the coming months.”
Timothy Abram, vice-president of Starwood Capital, said: “We have made several major investments in Manchester over the past decade and, following on from these successes, we are excited to have another opportunity to invest in the city.
“The redevelopment of this prime site has the potential to generate many economic benefits for Manchester and we hope this will be the first of many investments made through our new joint venture with Alliance.”
The development plans will aim to reduce waste and emissions during the construction phase, according to the JV partners. “We are committed to helping make Manchester a zero-carbon city by 2038 and that will mean more environmentally friendly construction practices across all our schemes, including the redevelopment of this site,” said Russell.
CBRE acted for Starwood Capital and PAG on the acquisition, while PAG was advised on legal matters by Shoosmiths, and Starwood by law firm Paul Hastings. JLL and Savills advised Urban & Civic on the sale.
PAG is building several Greater Manchester schemes, including the £85m Oxygen cluster of three residential towers on Store Street, and the £50m Uptown off Trinity Way in Salford, which have a combined gross development value of £400m, according to the developer.
It is also building elsewhere in the North West, for example in Leigh, as well as in Leeds, Chester, Nottingham and Birmingham.