Downing Street Industrial Estate, AXA, p Google Earth snapshot

The site is located close to ID Manchester and Mayfield. Credit: Google Earth

TfGM offers insight into £16.4m Manchester site acquisition

Transport for Greater Manchester acquired Downing Street Industrial Estate for significantly more than the £11m asking price late last year and until now has not spoken about its plans for the site or why it paid so much for it.

Six months on, a recently published Greater Manchester Combined Authority report has revealed TfGM paid a total of £16.4m for the site – £15.5m plus tax and purchase costs – £5.4m more than the vendor had sought.

A spokesperson defended the purchase price when Place approached TfGM.

The organisation said the acquisition followed a “competitive bidding process” and was “supported by external valuation advice and a red book valuation”.

“The price paid reflects the market value for this strategically important and highly sought-after site,” the spokesperson said.

Having not come out publicly to explain the purchase at the time, TfGM has now confirmed the site will “support future transport initiatives that are under development [and] could also help TfGM save money as a site for some of our operations”.

In the short term, TfGM is seeking to significantly increase the 74,000 sq ft complex’s rental output to help it pay back the money borrowed to buy the site.

“We are currently exploring opportunities that could maximise and grow existing rental income by as much as 60%,” the spokesperson said.

At present, the industrial scheme is home to Royal Mail, Speedy Asset Services, and Clear Channel. It generates a passing rent of £500,000 a year. Vacant possession could be achieved in early 2028.

Axa, which put the site on the market last autumn, had sought bids of £11m; a sale at that price would have reflected a net initial yield of 4.27%.

The £15.5m purchase price reflects a NIY of 3%, a yield significantly sharper than has been seen across similar transactions in recent months and years.

The spokesperson said the initial asking price “does not take into account that the asset was significantly under-rented, with a number of rent reviews outstanding”.

TfGM beat off stiff competition from developers for the site, which is located between ID Manchester and Mayfield, the city’s two largest regeneration schemes.

A massing study carried out by Matt Brook Architects indicates the site could accommodate a 46-storey tower as part of an 818-home development. However, this is unlikely to feature within TfGM’s plans.

Your Comments

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They must have used the same valuers for the Ancoats retail park.

By Anonymous

Well done for perusing Place, important question given such a substantial sum of public money. They do seem to have tried to duck it with a very generic answer that amounts to “we bought it for things”. Profit on a future tower? New HQ? Bus depot? Mix of all?

By H

TFGM are a law unto themselves

By Anonymous

I’m sure TfGM like any organisation has running costs and operational factors to consider. Also location is rubbish for residential anyway – who wants to live next to Mancunian Way and A6 on three sides with traffic and fumes past 24/7? Fed up of this lazy “let’s build a tower on it” approach to every site. Would make more sense to close Hyde Road bus depot and build medium density family housing there which the city desperately needs.

By Anonymous

The council should do the same in order to provide more green spaces in the city centre

By Anonymous

Anon @ 11.04 …. “location is rubbish for residential anyway – who wants to live next to Mancunian Way and A6 on three sides with traffic and fumes past 24/7?”

…then you suggest ” build medium density family housing there” …eh?!

By Boom

Bee Bus Depot. Simples

By now

No indication of where Stockport bus depot will be relocated to when the residential plans take it

By Dave C

Slow news day

By Bob Monkhouse

1:46 pm
By Boom

Read the comment again, they’re suggesting building that on the site of the Hyde Rd bus depot, not the Downing St site.

By Loopo

How odd, the sites worth what a willing buyer and seller are prepared to complete on. That said to pay almost 50% more than the asking price whatever the future opportunity is hard to stomach.

By TJL

It makes sense to have the depot near to major transport hubs. An office block would also be convenient for bus / train commuters. Residential has to be out of the question.

By Anonymous

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