Manchester sold itself to Abu Dhabi’s elite - Guardian article

[mac]

Is this fake? Guardian towers Abu Dhabi.View attachment 50440

If true I hope he gets stripped searched by the biggest hairest security member every time he uses the airport.

 

[Saddleworth2]

If you're really interested -

View attachment 50442


Data gleaned from viability assessments suggests that the prices of land leased by Manchester City Council to Manchester Life are lower than for comparable sites purchased by other developers. When accounting for the price paid per unit, the value of land at Eliza Yard, a 118 Build to Sell development brought forward in 2021, was estimated at £5,600 by the consultancy Savills. This compares to an estimated price paid per unit of roughly £15,000 for the Victoria Riverside site bought by the Hong Kong developers Far East Consortium, and £17,000 for the Fierra Capital development on Long Acre Street, both considered comparator developments by Savills.


In response to our queries, Manchester City Council said that all leases achieved best consideration, were underwritten by a red book valuation at the time and involved the payment of a premium. Variations in the range of prices per unit paid may partially reflect additional costs due to differences in site conditions and may also reflect decisions to sell at different moments in the property market cycle, with land values likely to be lower in the post-recessionary period of 2014 and 2015. It is nonetheless notable that the price per unit paid to developers can be much higher for neighbouring developments even in years like 2016, such as the £38,251 paid for the NCP car park site on Tib Street in Manchester’s Northern Quarter – two years before the leaseholds were sold for the One Vesta Street development, where the price paid per unit was considerably lower (figure 5).

The council claims that they have ‘overage’ arrangements in place which may provide them with additional income. However, they were unwilling to disclose the details of those overage arrangements on commercial grounds: e.g. how much are they entitled to, what events trigger the overage payment (does the leasehold need to be sold, for example?) and above what threshold do overage payments kick in? The council also did not provide us with a figure for how much they had received via overage payments in the project overall (i.e. via land, buildings, rental income etc), and we can find no details of these arrangements or record of any overage payments received by the council in their accounts or the public domain generally.

It is important to be sensitive to the conditions of each plot. A lower estimated price per unit paid may also reflect requirements for lower carbon development at, for example, Eliza Yard as a land plot owned by Manchester City Council. However, overall our estimates of the prices paid per unit for other Manchester Life projects suggest that Manchester Life have been able to access land at a cheaper rate than many comparable developments. We estimate that if the leasehold transfers had used a calculation of £17,700 per unit, equivalent to that of Ancoats Gardens, the Council could have leased land to Manchester Life for a total of £17,292,900. This would have generated an additional £12,341,620 in income to the public purse, rather than the £4,951,280 that was actually received.

It should be noted that the market price paid to the council for these leaseholds is also much lower than land bought by the council in the vicinity at market value. For instance, the council bought the nearby Ancoats Retail Park in 2017 at over £3.2m per acre, over four times higher than the average price of the leaseholds paid by Manchester Life entities. The Council may be selling the leasehold at the bottom of the market, while buying land back once a property boom is underway. If that is the case, there are questions to be answered about the council’s stewardship of its land assets and whether they are effectively protecting the option value of their own land assets.

In response to our queries on these features of the development, the council has stated that ‘from the outset Manchester Life was set up to restart the market and be a platform for multiple investors to deliver a significant number of homes on the eastern edge of the city in 2012/15 as a consequence of the earlier financial crisis of 2014/15. The partnership was established with robust financial and structural arrangements to protect the Council’s interests’61. This periodisation is contestable in our view – we would argue that the financial crisis took place in 2007/8 and that by 2014/15 some confidence had returned to real estate markets after significant government and central bank interventions. And whilst the council stresses that their governance arrangements have protected value for money, without evidence of value returned to the council we have no means of assessing that claim. In our view, the comparably low rates paid for the leaseholds for land in the absence of competition raise value for money questions.

Ok thanks. Seems to have some basis in fact. It will be interesting to see if there is a response to the article by the Council or Manchester Life. The article doesn't mention wether the sales have been made under competitive conditions either (Manchester Life might have been the only bidders for the land parcels they bought).

 

[bakerdave76]

If true I hope he gets stripped searched by the biggest hairest security member every time he uses the airport.

I have ask him on twatter no reply yet.

 

[Corky]

It is not much different from any other institutional investment in housing.

The old guard of Lees and Bernstein down the road is a positive.

Developers and investors have a history of taking the piss across the city.

 

[Gorton_Tubster]

On those odd occasions when the likes of TalkShite actually get round to talking about Manchester City, and after all the talk about limitless funds and expensive bench warmers, the no nowt pundits usually end up saying something along the lines of..."The regeneration of East Manchester has been a good thing though."

This article will get shared far and wide, and that particular line of praise will be no more. More likely to be accompanied by the words...questionable deals, or similar.

For the City haters, it's a Job Done.

Its all over rawk and ragcafe. They love it.

 

[blueinsa]

What a crock of shit this is from Aditya Chakrabortty. Large parts of the city would have remained a deprived shit hole if it wasn’t for this investment - just look at parts of Liverpool that remain underdeveloped.

How a great English city sold itself to Abu Dhabi’s elite – and not even for a good price | Aditya Chakrabortty

Manchester’s Labour council let Sheikh Mansour buy up acres of public land for seemingly a fraction of its worth, says Guardian columnist Aditya Chakrabortty

www.theguardian.com

More left wing anti City claptrap with a racist undertone at every single turn.

Fuck the lot of them.

 

[kaz7]

Why give him a thread , he will be wanking like a mad man

 

[west didsblue]

If you're really interested -

View attachment 50442


Data gleaned from viability assessments suggests that the prices of land leased by Manchester City Council to Manchester Life are lower than for comparable sites purchased by other developers. When accounting for the price paid per unit, the value of land at Eliza Yard, a 118 Build to Sell development brought forward in 2021, was estimated at £5,600 by the consultancy Savills. This compares to an estimated price paid per unit of roughly £15,000 for the Victoria Riverside site bought by the Hong Kong developers Far East Consortium, and £17,000 for the Fierra Capital development on Long Acre Street, both considered comparator developments by Savills.


In response to our queries, Manchester City Council said that all leases achieved best consideration, were underwritten by a red book valuation at the time and involved the payment of a premium. Variations in the range of prices per unit paid may partially reflect additional costs due to differences in site conditions and may also reflect decisions to sell at different moments in the property market cycle, with land values likely to be lower in the post-recessionary period of 2014 and 2015. It is nonetheless notable that the price per unit paid to developers can be much higher for neighbouring developments even in years like 2016, such as the £38,251 paid for the NCP car park site on Tib Street in Manchester’s Northern Quarter – two years before the leaseholds were sold for the One Vesta Street development, where the price paid per unit was considerably lower (figure 5).

The council claims that they have ‘overage’ arrangements in place which may provide them with additional income. However, they were unwilling to disclose the details of those overage arrangements on commercial grounds: e.g. how much are they entitled to, what events trigger the overage payment (does the leasehold need to be sold, for example?) and above what threshold do overage payments kick in? The council also did not provide us with a figure for how much they had received via overage payments in the project overall (i.e. via land, buildings, rental income etc), and we can find no details of these arrangements or record of any overage payments received by the council in their accounts or the public domain generally.

It is important to be sensitive to the conditions of each plot. A lower estimated price per unit paid may also reflect requirements for lower carbon development at, for example, Eliza Yard as a land plot owned by Manchester City Council. However, overall our estimates of the prices paid per unit for other Manchester Life projects suggest that Manchester Life have been able to access land at a cheaper rate than many comparable developments. We estimate that if the leasehold transfers had used a calculation of £17,700 per unit, equivalent to that of Ancoats Gardens, the Council could have leased land to Manchester Life for a total of £17,292,900. This would have generated an additional £12,341,620 in income to the public purse, rather than the £4,951,280 that was actually received.

It should be noted that the market price paid to the council for these leaseholds is also much lower than land bought by the council in the vicinity at market value. For instance, the council bought the nearby Ancoats Retail Park in 2017 at over £3.2m per acre, over four times higher than the average price of the leaseholds paid by Manchester Life entities. The Council may be selling the leasehold at the bottom of the market, while buying land back once a property boom is underway. If that is the case, there are questions to be answered about the council’s stewardship of its land assets and whether they are effectively protecting the option value of their own land assets.

In response to our queries on these features of the development, the council has stated that ‘from the outset Manchester Life was set up to restart the market and be a platform for multiple investors to deliver a significant number of homes on the eastern edge of the city in 2012/15 as a consequence of the earlier financial crisis of 2014/15. The partnership was established with robust financial and structural arrangements to protect the Council’s interests’61. This periodisation is contestable in our view – we would argue that the financial crisis took place in 2007/8 and that by 2014/15 some confidence had returned to real estate markets after significant government and central bank interventions. And whilst the council stresses that their governance arrangements have protected value for money, without evidence of value returned to the council we have no means of assessing that claim. In our view, the comparably low rates paid for the leaseholds for land in the absence of competition raise value for money questions.

More interesting was the previous table in the report where it is shown that the council sold about 7 acres of derelict land for about £5M which doesn't seem unreasonable. The price per unit comparison is a bit meaningless when comparing 2015 with 2018/21 when where we are not given the acreage sold in subsequent sales and the general increase in property prices is not mentioned. ADUG were always going to get a fairly sweet deal because they took a risk to build on what was a shithole. The comparison with 2018/21 does not take into account the fact that the area had improved significantly due to the earlier investment.
There's also no mention that all these new properties are yielding council tax.
The headline was a bit moronic as well. 7 acres is 0.02% of Manchester.

 

[domalino]

More interesting was the previous table in the report where it is shown that the council sold about 7 acres of derelict land for about £5M which doesn't seem unreasonable.

Those are the same properties & deals, the table you're referring to simply showed which Jersey based company the land was transferred to.

 

[bugsyblue]

Very odd. Has East Manchester considerably changed for the better due to this deal? Yes. Is the sheik making money off the deal? Probably, like any land developer (we live in a capitalist world). Was the land undersold or was the deal clouded in controversy? No, doesn't seem to be the case.

I'm surprised the article was given the green-light by the editor. It's pointless.