The billionaire owner of a bridging lender is making a £40 million bet on a Manchester site earmarked for major development.
Fred Done, the principal shareholder of bridging lender Goldentree Finance, has announced plans to develop a 220,000 sq ft office block in the centre of Manchester called No 2 St Peter’s Square.
In an interview with Property Week, Done, 71, explained how he started his empire with one solitary shop in Salford and half a century later has amassed 1,380 betting shops.
He has now announced the speculative start of No 2 St Peter’s Square. The idea is to cash in not just on the improvement in general economic conditions, but on more than £250 million of public improvements taking place on the square.
Second in the new speculative phase to One St Peter’s Square, the block with an end value of £80 million will be funded from the Done family’s pockets and will aim to attract big-name tenants lured by the rapidly changing location of St Peter’s Square. Demolition begins in Autumn.
“If I’ve got one strong judgement from my experience of betting shops, I know how to find a good pitch,” Done told Property Week. “I know what locations mean. What I love about this one is that it’s got everything: tram stops, a hotel there, a central library there, it’s absolutely bob on.”
Working alongside business partner Darryl Lee under Mosley Street Ventures, Done is understandably pleased with the location, opposite Manchester Town Hall, near the Midland Hotel, and neighbouring Argent and the Greater Manchester Property Venture Fund’s One St Peter’s Square.
Having boldly promised in January to put his hand in his pocket to fund the £40 million construction of No 2 St Peter’s Square, he is now making a fresh bid for authenticity, this time in prime office development.
“All the permissions are there,” he told Property Week. “We’re about to go out to tender in the next few weeks. This building, without any tenants, will attract blue-chip companies, and we are speaking to people in a very serious way. On a speculative basis. If we manage to acquire tenants in the meantime, then that’s more power to our elbow.”
Assuming hoardings do appear around the site in August or September as promised, then the speculative gamble made by Done, Lee and colleagues, could equally be interpreted as a vote of confidence. No doubt their letting agents at DTZ would like to agree.
The office market in Manchester has been dominated by shrinking and consolidating occupiers, either soaking up existing empty space or leaving altogether. Adding a speculative crane to the city skyline once more for an office scheme, after seven years of pain, this could give footloose tenants the market confidence they need to commit.
Done added: “This project once completed will create one of Manchester’s most sought after office spaces.
“We have worked extensively with the City and English Heritage to ensure the design compliments their vision for the changing face of St Peter’s Square. We are extremely proud to be connected to this project and the quality of the building that will be created.”
Sir Howard Bernstein, Chief Executive of Manchester City Council, said: “The redevelopment of St Peter’s Square is key to the growth of Manchester’s economic centre. Our vision is to provide a world class setting to help reinforce the perception of Manchester as a dynamic, creative and
confident city.
“The investment in Manchester’s City Library, the extension of the Town Hall and the Metrolink Second City Crossing is going to reinvent the site, and No 2 St Peter’s Square is an important element of that.”
As well as offices there will be 5,500sq ft of retail and parking for 43 cars.
DTZ has been appointed as agents for No 2 St Peter’s Square, while Deloitte Real Estate is providing planning advice. Debt funding for the existing site has come from Santander.
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