X1 vehicle collapses leaving apartment investors in the lurch

The X1 company delivering part of the Manchester Waters masterplan between the ship canal and Bridgewater Canal in Trafford has entered administration, with only three of five planned buildings completed.

X1 Manchester Waters Limited, part of the wider X1 Developments group, took steps towards entering administration in May having run into difficulties on the project. FRP Advisory was appointed as administrator on Thursday. The administration does not impact the three completed buildings or wider Manchester Waters masterplan, according to landowner Peel Waters.

David Acland, partner at FRP Advisory, said: “We have been appointed to an incomplete development that has stalled due to a combination of pressures affecting the wider construction sector.

“Our immediate focus is on assessing all available options and engaging with key stakeholders connected with the scheme, including purchasers, who we will be contacting directly as soon as possible.”

X1’s Manchester Waters difficulties were outlined in a letter sent to investors earlier this year and seen by Place North West. It said construction costs for the final two towers had risen by £18m due to inflation and increased regulatory requirements as a result of the Building Safety Act.

In total, 336 purchasers have put down deposits on flats within the two unbuilt towers at Manchester Waters – 158 in Block E and 178 in Block D – in 2021 and 2022, the letter said. Investors in the three completed towers are unaffected by the administration.

Flats in Block D started at £149,995 and those in Block E could be purchased from £164,999, according to X1’s website, where investors were advertised high returns due to Manchester’s booming residential market.

“These fully managed apartments combine strong capital appreciation with dependable passive income, in an area with exceptional rental demand”, the website states.

The letter sent to investors earlier this year sought agreement from the purchasers to a 12-month moratorium, during which time X1 would redesign the scheme to comply with the BSA. The plan ultimately was to sell the site and repay investors in full, according to the letter.

“Sale of Blocks D and E as a whole to a single institutional fund, which we consider the most appropriate exit strategy…is expected to generate developer profit in the region of £17m–£22m”, the letter states.

X1 was contacted for comment.

X1 entered into a development agreement with landowner Peel to deliver the five-building scheme in 2016. To date, three buildings totalling 406 apartments have been constructed.

A Peel Waters spokesperson said: “We are extremely disappointed that X1 Manchester Waters Limited has fallen into administration.

“Planning was secured in 2019 and Peel subsequently sold the land to X1 Manchester Waters Limited and three of these towers, comprising of 406 homes, have been completed and sold.

“The administration of this developer does not impact Peel Waters or the delivery of the wider Manchester Waters masterplan and Peel is not affiliated with, nor responsible for, any homes sold off-plan by X1 Manchester Waters Limited.”