Gary Neville’s £200m St Michael’s scheme has signed a joint venture to help develop the Manchester city centre project with a global private equity firm which backs the likes of UFC and hair care brand Wella.
Relentless has announced the deal with New York-based KKR to deliver the development which will include a hotel, flats and offices.
Initial work on the site is expected towards the end of the year in the commercial phase of the project.
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The joint venture, KKR’s first real estate investment in Manchester, will include a 200,000 sq ft sustainable building.
KKR’s investment was made through its $2.2bn second dedicated European real estate fund, KKR Real Estate Partners Europe II.
The first phase of development will see the former Bootle Street City Police Headquarters brought back to life and the refurbishment of one of Manchester’s most historic pubs, the Sir Ralph Abercrombie.
“Substantial” public space will also be created, in the development of Abercrombie Square and a 20,000 sq ft roof terrace with views overlooking the Grade I listed Town Hall and library.
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Gary Neville of Relentless said: “The team has worked throughout lockdown to bring this project forward. St Michael’s has been challenging but with the support of KKR we are looking forward to delivering this exciting project in Manchester.
“The Relentless team welcomes KKR to Manchester and can’t wait to deliver what we know will be an exceptional space for our city.”
Charles Tutt, head of UK real estate at KKR, added: “This is a unique regeneration project in a vibrant city. We have worked very closely with Relentless and the project team to get to this point and we look forward to delivering this exceptional development for the benefit of Manchester as businesses seek high-quality office space to meet their ever-evolving needs.
“This investment reflects our strategy and focus on investing behind best-in-class office projects and alongside expert local developers.”
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The first phase of St Michael’s is expected to have a build period of approximately two years from starting on site.
Later phases of St Michael’s will enhance the hospitality offering in Manchester with a five-star hotel and residential tower, with works expected to begin in 2022 once the hospitality sector has recovered from the impact of the pandemic.
Anthony Kilbride, chief executive of Relentless, said: “This moment is a catalyst to get the project on-site by the end of this year.
“The Relentless team and KKR have already done a lot of the groundwork needed to enable us to move the project forward quickly.
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“Our teams are aligned on the vision to deliver a world-class sustainable commercial space and new public realm in the city and will be working on the final stages of design in the coming months.”
Sir Richard Leese, leader of Manchester City Council, added: “Navigating the complexities of this development within the constraints of the site has undoubtedly been challenging, but we know the outcome is going to be truly transformational for this part of the city centre – with world class place making key to its success.
“This type of investment is the precise antidote we need in the city to balance the economic impact of the last year.”
The council’s CEO, Joanne Roney, said: “Manchester is a city of ambition, and we expect that same energy from our developers. St Michael’s is oozing ambition – from the low carbon office space to the public realm.
“This is the sort of development that cities crave and the sort of investment that is vital to our swift economic recovery following the pandemic.”