Full Report - 3towers Apr 06

Investment Proposal The Three Towers – Emmeline Manchester

April 2006 Strictly Confidential

1 2 3

Summary Information ........................................................................................................3 Executive Summary...........................................................................................................4 Introduction ........................................................................................................................5 3.1 The opportunity............................................................................................................5 3.2 The developer: Urban Splash Plc................................................................................6 3.3 The Development ........................................................................................................9 3.3.1 Development specifics..............................................................................................9 3.3.2 Surrounding environment .......................................................................................15

4

Manchester ......................................................................................................................18 Manchester: Key Industries .............................................................................................18 Education .........................................................................................................................19 Transport and Infrastructure ............................................................................................19 Leisure and Tourism ........................................................................................................21 Shopping..........................................................................................................................22

5

The Manchester Residential Market................................................................................23 Overview ..........................................................................................................................23 Comparable Competition .................................................................................................23 Market Trends and Capital Growth..................................................................................24

6 7 8

Regeneration Programmes..............................................................................................27 The Developer - Current and future projects ...................................................................28 The Development location ...............................................................................................29 Project Team ...................................................................................................................29 Unit Pricing.......................................................................................................................30 Apartment Specifications .................................................................................................30 Leasehold Information .....................................................................................................30

9

Investment Factors ..........................................................................................................31 Key Points........................................................................................................................31 Target Market ..................................................................................................................31 Finance ............................................................................................................................31 Investor Benefits and Purchase Terms ...........................................................................32 Owner Occupier Benefits and Purchase Terms ..............................................................33

10 11

Sources of Information.....................................................................................................33 Disclaimer ........................................................................................................................33

Appendix 1: Appendix 2: Appendix 3:

Floor plans .......................................................................................................34 Apartment Specifications .................................................................................35 Comparable Developments in Manchester .....................................................36

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1

Summary Information Opportunity:

62 apartments in 1 tower block

Development Name:

The Three Towers, Emmeline

Location:

City of Manchester, Irk Valley, Ward of Cheetham

Developer:

Urban Splash plc

Type:

Refurbishment

Price Range:

£88,780 - £147,645 (inclusive of parking)

Incentives:

Completion: Opportunity:

• • •

15% Discount Free parking space worth £7,500 No Stamp duty*

Jan 2007 (Estimated) • • • •

Long completion timeframes. Favourable pricing Capital growth of 6% expected per annum Later phases of the development set to be launched this year at much increased prices and with an extensive PR and marketing campaign, which is expected to significantly boost values of the first block.

Payment Schedule

10% on Exchange of Contracts within 21 days Balance on completion

Contract Restrictions:

Assignable contracts permitted, but no local or national advertising or marketing rights for resale granted without the prior written consent of Urban Exposure Ltd.

Reservation Fee:

£1000 non-refundable

*As at April 2006 Stamp Duty Land Tax Rates

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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2

Executive Summary

We believe this to be an excellent opportunity to buy stunning apartments from a high profile developer on the peripherals of central Manchester, at prices that are excellent both for first time buyers and investors. •

48 x one bedroom & 14 x two bedroom apartments, together with 62 allocated parking spaces, per block.

•

15% discount off the current open market value; prices from £88,780 per unit

•

The fully refurbished site will consist of three residential apartment blocks all within 10-15 min walk to the city centre, but which at present are priced at almost half the price of equivalent City Centre apartments.

•

Our expectation is that the list prices (subject to market conditions) will be raised by 5 - 10% for block 2 and 10 – 15% for block three when these are released to the public.

•

The area is undergoing extensive regeneration with a project to revive the Irk Valley, including extensive landscaping, potentially a new Metro Station and a £20m investment in a new Tesco supermarket and associated infrastructure

•

Manchester itself has a vibrant property sector with good capital growth figures compared to the rest of the country and a healthy rental sector

•

The units will appeal to both off-plan investors and first time buyers/owner occupiers

•

The development has excellent potential for capital growth due to the o

Reputation of the developer

o

Specification of the units

o

Projected rental yields

o

Proximity to the City Centre

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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3

Introduction

Two key factors in understanding the potential of the 3 Towers development for both investors and owner occupiers alike are: •

the opportunities inherent within the buoyant and lucrative Manchester residential market.

•

the enormous pedigree of the developer, Urban Splash, in transforming and regenerating areas throughout the UK.

3.1 The Opportunity The new residential and commercial developments in the past decade have transformed Manchester City Centre into one of Europe’s most exciting and economically progressive cities. The city centre has been regenerated far above the most ambitious of expectations. It has become a truly cosmopolitan city, embracing all aspects of the arts, shedding the cloak of 19th century industrialism and re-launching itself as a world-class destination for service driven industries. This regeneration has been made possible thanks to the incredible overhaul of the greater Manchester transport infrastructure. This transformation has seen the Manchester residential landscape change at an unprecedented level. Gone are the tawdry images of rows and rows of red-bricked “Coronation Street-style” houses, replaced instead with some of the most innovative, design-led, city centre residential developments in the whole of Europe. The growth of the Manchester residential market has been so strong that experts and commentators have suggested that the city has reached its peak for the time being. We actually concur in principle with this view when you consider that average apartment prices in the city are in the regions of £170,000-£270,000. This has placed the affordability of the city centre market out of the reaches of a majority of young professional owner-occupiers working in Manchester. Ironically, it is the slow-down in the upper echelons of the Manchester residential market that this opportunity exploits. In the North West, demand for new-build property has never been higher, whilst the affordability levels have never been lower. The key to continued success in The Manchester market is the ability to bridge this gulf by providing cutting-edge apartments at affordable levels for the majority of young professionals, and to ensure these apartments are within walking distance of the city centre. This is a paradigm shift in developer thinking but this is exactly what we deliver! In order to deliver on such a fantastic proposition, we needed to work with the best and most innovative city-centre regeneration specialists in Europe. Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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3.2 The Developer: Urban Splash Plc Tom Bloxham MBE and Jonathan Falkingham set up Urban Splash in 1993. They were among the first in Britain to see that the many under-used historic buildings and brown field sites in our cities could be transformed into exciting, new mixed-use spaces - in doing so stimulating broader regeneration of our urban communities. To date, Urban Splash has already created over one million sq ft of award-winning residential and commercial space, with another 100 million sq ft in the pipeline.

Urban Splash work on the basis that any urban redevelopment is about more than just bricks and mortar. It’s about using enlightened design, creating new communities and enhancing people’s lifestyles. That’s what makes them different from other housebuilders and that is also why so many investors have purchased so readily in their previous schemes.

It is not uncommon for Urban Splash developments to be .

sold out in one day, with overnight queues a regular occurrence.

Tom Bloxham (CEO) sits on both the Government’s Property Advisory Group and Urban Sounding Board and has been awarded an MBE for services to architecture and regeneration.

His unique position affords Urban Splash access to very exciting projects in areas shunned by less imaginative developers, leading to the development of extremely desirable homes at exceptional prices Since 1993, Urban Splash has received a staggering 135 regional and national awards. These include 26 Royal Institute of British Architects awards, 16 civic awards, 11 regeneration rewards, 32 other architects awards, 10 business awards, 14 marketing awards and 26 personal awards.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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The Urban Splash resume of past projects features many of the UK’s most innovative urban regeneration schemes of the last decade. With their roots in the Northwest, they’ve played a crucial role in that area’s development into one of Europe’s most exciting regions. The Urban Splash schemes in Liverpool have been identified as one of the key drivers of regeneration that lead to Liverpool being awarded the prestigious honour of being The European Capital of Culture 2008.

Before

Budenburg Project - Altrincham

After

The scale and ambition of Urban Splash developments have struck a chord with pioneering investors who have seen excellent capital growth in their investments. Investors attribute this growth to the unique design, high specification and high build quality of the schemes together with the brand recognition of Urban Splash with owner-occupiers in the area. It is the growth in the areas surrounding the developments that many attribute to the significant uplift in value. Basically, where Urban Splash go, everyone else soon follow.

Before

Lister Mills - Bradford

After

Areas such as Castlefields in Manchester and Concert Square in Liverpool have seen a dramatic upturn in fortunes as a result of the innovative Urban Splash projects. What were once areas of disused warehouses and factories, have now become trendy desired locations to live and work with significant price rises in the process. So in effect, Urban Splash developments in all new areas are not only making communities, they are also ‘making the market’ in pricing terms.

As developers, Urban Splash are not just concerned with maximising profits. They have an emotional attachment to their projects rarely seen in the industry. Whenever possible they will plan for open

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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spaces to foster a sense of community within their developments and this philosophy is an important contributing factor to their continued success.

Before

Concert Square - Liverpool

After

To see further examples of Urban Splash developments please see the PowerPoint presentation that accompanies this report.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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3.3 The Development The 3 Towers are set to be a feature on the Manchester skyline; an aspirational development transforming the surrounding area. Urban Splash are taking 3 derelict, disused tower blocks and delivering a scheme of 3 contemporary landmarks with landscaping that will be unrecognisable from the existing site. North Manchester development authorities view this development as a catalyst of regeneration for the entire area and the potential for capital growth is enormous for anyone investing at this early stage. 3.3.1 Development specifics Below is an excerpt from the planning and design statement submitted by Union North (the architects) for the current scheme.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Emmeline, the first Tower, stands 12 stories tall. The original building was designed to a “one size fits all” mass production ethos, and their oppressive homogeneity and laboured repetition in plan and detail accounts for much of their unpopularity today. The modern housing market requires diversity, and careful study of these blocks has found that the centralising servicing of the blocks is highly suited to a more flexible planning layout. Urban Splash has exploited this to the maximum leading to nine different apartment layouts in total within the block, with each of these made even further individualistic through varying the window arrangements in each apartment.

2005

2007 Tower 1: ‘Emmeline’ (before and after pictures)

The actual floor area in each apartment is very spacious (by today’s standards) and this has been fully utilised to create dramatic open-plan living spaces, together with floor-to ceiling glazed windows affording stunning panoramic views over the whole city. Sliding doors will extend living spaces into the remodelled balconies transforming utilitarian drying areas into ultra-desirable outdoor spaces.

In keeping with the Urban Splash ethos of regeneration, the aim is to do a lot more than simply ‘dress’ the existing buildings. To achieve the maximum catalytic effect that this development will have on the area, 3 ‘new’ buildings will be delivered. The refurbishment of these buildings will most definitely lead to 3 cutting edge and aesthetically striking structures, breathing new life into the surrounding community.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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The site is situated in the Irk valley, a highly significant area outlined by the Manchester City Council and Planners for huge investment and regeneration from both Government and private sources. The hillside location coupled with the 12 storey height of the building ensures phenomenal views across the whole of the city centre skyline.

th

Typical 9 floor view of the Manchester City Centre skyline

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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One of the key features of the development is its proximity to the city centre. As we aim to make stylish city living more affordable for the average professional, we have the ideal site to achieve our goal. Although the area is a regeneration zone, we are confident that the location of the site (within 10 minutes walk of The Northern Quarter) will be a key factor in attracting local interest. The area will undergo major transformation in a very short space of time, giving high specification units immediately adjacent to the burgeoning centre that is Manchester.

Walking guide (in minutes) from 3 Towers to prominent Manchester Locations

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Computer Generated Image of the completed 3 Towers Scheme

The buildings will be completely stripped back to their bare concrete frame with the façade ripped down and replaced with a elegant and warm timber and timber veneer ‘cladding’, utilising staggered horizontal blocks and vertical joints accentuated by different tones in the timber. The cladding will have a ‘sheen’ which exaggerates the difference between panels in the light and those in the shadow, reinforcing the contrast between the solid timber blocks and the ‘voids’ cut from the balconies.

This high spec façade rebuild will be marketed at our target pricing levels to satisfy our bold mission statement. Pricing is kept low because it is unnecessary to construct the development from foundations up. The main core of the building remains and therefore the savings in build costs will be passed to investors in terms of higher specification units and landscaped common garden areas.

Sample cladding used on previous schemes

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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3 Towers site

Tower 1 – ‘Emmeline’

Tower 1 – ‘Emmeline’ Impression of completed 3 towers development with full landscape plan

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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3.3.2 Surrounding environment Below is an extract from the planning and design statement for which planning permission was granted:

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Aerial view of Tower 1 ‘Emmeline’ with full landscape plan

The tower has an important landmark position as seen from Dalton Street. This position will be enhanced by playful positioning of walls combined with scattered cherry trees that will provide a pink cloud of blossom in early spring. Two main vehicular and pedestrian access points are provided via Burton Street (upgraded) and Davy Street. Both entrances will be controlled by means of a swipe card security system. Ample space is provided for refuse collection and emergency vehicular access from the Davy street entrance. A more informal pedestrian access is provided at the corner of Dalton Street and Collyhurst road.

The parking is arranged along terraced slopes and will provide 62 spaces with 4 disabled spaces on the upper terrace close to the main building entrance. Rows of ash trees create a visual link to a newly created wild flower meadow, which safeguard possible future development. Parking will be lit by means of 16 metre high stainless steel lighting columns each of which consists of several light sources shining in different directions. The car park is located close to the tower and is over looked by the north facing apartments providing additional security to the CCTV system.

The landscape experience is extended along the ridge of the valley by means of a network of footpaths that provide views over the river Irk. This part of the site consists of existing plantations that will be carefully managed and enhanced with additional planting of Birch and Cornus.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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The perimeter treatment of the site consists of three types of boundary fencing depending on situation. Alongside the main road, security definition is provided by a combination of blue brick walls and specially designed metal fencing. Alongside the back of existing housing on Dalton Street a specially designed timber fence is provided while a chain link fence will run through the northern wooded valley slope. The main entrance to the tower consists of natural stone that extends into the building.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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4

Manchester

Greater Manchester incorporates the

cities

Salford,

of

and

Manchester the

and

metropolitan

boroughs of Bolton, Bury, Oldham, Rochdale,

Stockport,

Tameside,

Trafford and Wigan. It is the economic centre of the North West and is the largest sub-regional economy outside London and the South East. With a population of just over 3 million (37% of the total region’s population), the City generated Gross Value Added (GVA) of £47bn in 2002, approaching half of the North West total, and was the largest contributor to output outside London and the South East. The city region’s strong economic growth is forecast to continue over the next decade, at an annual average of 2.9%, ahead of both North West and UK rates (source: The Northern Way, 2005) The City of Manchester has seen an abundance of regeneration activity since an IRA bomb in 1996 devastated part of the centre. This tragic event is seen as the catalyst for regeneration and development, which has continued unabated to the present day. With resources and strategy from The North West Development Agency, English Partnerships and the local council, pioneering regeneration schemes have successfully transformed the City Centre, and disused industrial or brownfield areas such as Castlefield and Ancoats. Manchester: Key Industries •

Financial and Professional Services: The city region is the largest centre for financial, professional and legal services outside London, currently employing nearly 160,000 people in Greater Manchester (indeed the Bank of New York recently opened premises in Manchester). A large number of major legal, insurance and investment businesses locating premises in the city has resulted in Manchester becoming a national as well as regional service centre.

•

Life Sciences: with AstraZeneca, Aventis and GlaxoSmithKline.

•

Creative industries: with the BBC and Granada. The BBC is relocating some of its core channels from London to Manchester over a period of 10 years, creating some 4,500 jobs in the area.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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•

Manufacturing: Despite a decline in employment numbers, manufacturing remains an important feature of the economy employing over one in ten (13%) employees in the city region and generating around 21% of GVA. Alongside traditional industries, the city region has started to develop a specialism in areas such as electronics, chemicals, and pharmaceuticals.

•

Communications: The sector is now one of the most dynamic locally and is forecast to grow strongly over the next ten years both in employment and GVA terms - driven by the continued growth of the telecoms sector (grown nearly 50 per cent since 1998). Over the next decade the sector is expected to be one of the most important generators of wealth for the city region. Source: The Northern Way, 2005

Education Manchester has an educational sector befitting a City of its size. The city region has 6 of the North West’s 16 Higher Education Institutions, with a combined income of more than £670m per annum and a student population of over 90,000 making a contribution of around half a billion pounds to the City region’s economy. There are 182 primary and secondary schools, and 3 major Universities. •

The University of Manchester has over 35,000 students in undergraduate and postgraduate courses, as well as some 10,500 staff.

•

Manchester Metropolitan University has a further 34,000 students and 4500 staff.

•

The University of Salford has some 18,000 students and 2,500 staff.

Transport and Infrastructure The development is located just outside the City Centre in an area called Collyhurst, which is well located for all transport means. Transport mode

Location

Distance from development

Train stations

Manchester Victoria

1.04 miles

Coach stations

Manchester

1.24 miles

Airports

Manchester International Airport

9.21 miles

Ferry ports

Liverpool

32.75 miles

Road The M62, M60 and M5 motorways link the city to the north, south, east, and west, and the A665 provides direct access to the development itself. Approximate travel times by road are London - 3hrs45, Newcastle 2hrs45, Leeds 1hr, and Liverpool 45mins.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Rail Manchester Victoria and Piccadilly train stations are within walking distance and offer connections to major stations across the country including, London 2hrs15, Glasgow 3hrs30, Newcastle 3hrs, Birmingham 1hrs30 Leeds 1hr, and Liverpool 1hr (approx).

Air Manchester Airport handles 22 million passengers a year traveling to over 200 destinations. The international flights, provided by the major airlines such as British Airways, are matched by excellent national and local links; London can be reached in 1hr, Paris in 1hr30, and Amsterdam in 1hr35.

Metro link & Bus Services The Metro link is a popular and efficient tram service running from the City centre to the outer areas.

The nearest station to the development is at Crumpsell.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Leisure and Tourism Manchester City Centre is where most of the leisure and entertainment business is concentrated with a plethora of bars, restaurants, nightclubs and tourist attractions. •

In the City one of Europe's largest shopping malls, the Arndale Centre houses a huge number of restaurants and fast food outlets.

•

A futuristic leisure complex, The Printworks has been created housing restaurants, bars, a health club and IMAX cinema

•

The newly restored Corn Exchange offering high quality retailing will be opening for business soon.

•

Urbis, a new £29m visitor attraction and cultural facility based on the experience of the modern city has recently been opened

•

The Triangle in Exchange Square is a restored grade 2 listed building

The Corn Exchange

housing designer shops, restaurants and bars •

The Trafford centre, located on the Western outskirts of the city has 36 restaurants, a 20-screen cinema (attracting on average 28,500 customers a week), a state-of-the-art Laser Quest and an entertainment venue called Namco containing an 18-lane bowling alley. The Trafford Centre currently attracts 29.4 million visits annually with an average weekly total of 520,000. As a tourist destination, it attracts visitors from all over the UK (over 3,500 coaches bringing more than 100,000 people annually).

•

There are 2 world standard football stadiums with Manchester United playing at Old Trafford, and Manchester City at The City of Manchester Stadium, formerly the host venue for the 2002 Commonwealth Games and one of the most innovative sporting arenas in the country

•

G-MEX and the Manchester International Convention Centre host a variety of conferences, exhibitions, concerts and shows.

Irk Valley and neighbouring Collyhurst itself has a range of leisure and recreational centres available to residents. A £4 million new leisure and fitness centre, with a modern swimming pool, fitness suite and dance studio opened in early 2005. The City of Manchester stadium is only a mile away and other sporting and recreational facilities are located in Eastlands. Irk Valley is less than a mile from the bars and restaurants of the 'Northern Quarter' on the edge of the City Centre. This is Manchester's creative heart and is home to countless independent fashion stores, record shops, cafés and the world famous Afflecks Palace.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Shopping The City centre shopping facilities rival those of London, Leeds and Birmingham and serves as the main shopping destination for the North West. •

The prime retailing area is based around the pedestrianised Market Street and the Arndale Centre – which has over 200 shops and major department stores.

•

Out of town, the Trafford Centre has some 280 stores, including 6 large anchor retailers.

•

The Deansgate area of the city is now a fashionable destination-shopping hub with stores, which include House of Fraser, Selfridges, and Harvey Nichols.

•

The Trafford Centre

Marks and Spencer have recently opened a flagship store - their largest world-wide.

The Irk Valley and Collyhurst area is in line for a major boost with a £20 million investment in a new Tesco supermarket, complete redevelopment of the nearby Cheetham shopping centre, and high quality environmental improvements. The project will create more than 700 jobs. Irk Valley is less than a mile from the new North City Centre complex, and there are some local shops and a small supermarket in neighbouring Miles Platting. The centre is benefiting from a £9 million improvement scheme to create a light and modern major shopping and leisure destination.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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5

The Manchester Residential Market

Overview The new residential and commercial developments in the last decade have transformed the City Centre into a vibrant hub for citizens to work and live. Despite the number of new developments, Manchester continues to attract new residents encouraged by the growing number of amenities and inward investment from government led schemes, retail and leisure developments, and a variety of booming business sectors. The Deansgate area of the city is now a fashionable place to shop, live and work and is a prime example of Manchester’s upward mobility. In many respects Manchester grasped the concept of City Centre living before other major UK cities, and as such is a mature market in terms of new high-density residential developments. In fact, the early 90s Urban Splash loft conversions have been credited with kicking off the demand for fashionable citycentre living in the city. There have been numerous successful developments both past and present, with Britannia Mills and Timber Wharf by Urban Splash perhaps two of the most well-known ones of recent times. Comparable Competition A schedule of comparable developments, sizes and prices can be found in Appendix 3. Manchester has a great deal of new apartments under construction, but the majority seem to be aiming for the luxury market, in the £280 per sq/ft bracket. The following are 2 schemes, which we believe are the closest competitors to The 3 Towers due to their location and pricing.

The Green Quarter – Crosby Homes

The Three Towers

•

Consists of 1300 apartments phased over 8 blocks

•

• Block 1, 62 apartments

Offices & hotel being built as part of the scheme

•

• List prices:

Extensive landscaping to areas surrounding the apartments

•

• One bedroom units from

3 blocks currently sold out, Jefferson Place currently available

•

Prices are from £116,0000 for a 441 sq/ft one bedroom unit (£210 sq/ft) to £400,000 for a 1210 sq/ft duplex

•

£20,000 per parking space (only available with 2 bed units)

£88,780 for 463 sq/ft (£192 sq/ft) • Two bed units £117,730 for 694 sq/ft (£170 sq/ft) • Incl. free parking with all

Abito, Ask Developments •

apartments

Innovative studios designed to fit all essential components of an apartment into a compact living area

•

Marketed as affordable living for singletons and couples in the heart of the City

•

256 apartments, no parking

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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•

Prices from £89,750 to £161,000 (£254 sq/ft)

In comparison to these schemes, The Three Towers are very good value for money and should be able to compete effectively with regards to price, size, parking and specifications. Despite apartments in other developments being considerably more expensive, sales are still steady and mid-market apartments are selling within reasonable timeframes, penthouses and large duplex units are taking longer for developers to sell. Market Trends and Capital Growth Manchester has seen a steady year in terms of capital appreciation, much like the rest of the UK, achieving overall growth across all properties of 12.3%, and 6.5% on apartments specifically in the City region. Nationally the North West achieved the 4th highest growth rate for apartments at 9.2%, well ahead of London and the South East at 4.5%. (Note: Figures in this section are taken from the Land Registry and are for the period April to June 2005). Greater Manchester 2005.Average Cost: £127,246 Detached: £236,120 Semi-detached: £140,446 Terraced: £91,024 Flat: £135,045

Change in last quarter: 2.4% Change in last year: 7.8% Sales: 10094

Manchester Average Cost: £120,699 Detached: £242,466 Semi-detached: £141,307 Terraced: £87,556 Flat: £137,392

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

Change in last quarter: 9.7% Change in last year: 12.3% Sales: 2103

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Greater Manchester Local Authorities This table shows how apartment prices vary across the different Manchester Local Authorities, with the highest average current price first.

NAME

AV PRICE (£)

QUARTER

ANNUAL

SALES

Trafford

£172,913

7.8%

7.9%

183

Manchester

£137,392

-0.1%

6.5%

606

Salford

£131,827

-8.8%

26%

166

Stockport

£125,666

9%

6.8%

91

Bolton

£122,547

16.5%

31.3%

50

Wigan

£120,228

18.2%

39.9%

43

Oldham

£110,750

39.3%

10%

25

Bury

£97,851

-9.2%

-8.2%

56

Tameside

£91,632

-6.4%

16.9%

49

Rochdale

£90,764

-16.5%

45.3%

20

Price Comparison to the North West North West Average Cost: £132,015 Detached: £253,376 Semi-detached: £141,306 Terraced: £88,941 Flat: £128,131

Change in last quarter: 3.3% Change in last year: 8% Sales: 25418

North West Counties This table shows how apartment prices vary across the different counties within the North West, with the highest average current price first. Whilst other regions appear to have achieved higher levels of growth, this is based on lower levels of sales. AV PRICE (£)

QUARTER

ANNUAL

SALES

Cheshire

£142,596

0.9%

1.9%

285

Greater Manchester

£135,045

2.3%

10.5%

1289

Merseyside

£126,965

4.6%

11.1%

543

Warrington

£123,124

23.1%

19%

89

Lancashire

£117,133

-2.0%

10.2%

398

Halton

£110,637

16.4%

28.1%

17

Blackburn With Darwen

£86,885

20.2%

29%

62

Blackpool

£79,933

-7.4%

7.9%

98

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Price Comparison to National Regions This table shows how apartment prices vary across different regions of the UK with the North West fourth strongest.

AV PRICE (£)

QUARTER

ANNUAL

SALES

Greater London

£250,295

4.4%

4.5%

12764

South East

£148,010

2.1%

5%

10209

South West

£144,072

-0.8%

3.9%

3821

North West

£128,131

1.3%

9.2%

2781

Wales

£125,644

-0.3%

13.7%

672

Yorks & Humber

£124,317

3.1%

4.5%

1687

East Anglia

£120,458

-1.3%

15.2%

837

West Midlands

£120,417

3.5%

6.4%

2207

East Midlands

£110,202

-2.3%

2.9%

1034

North

£105,096

10.4%

13%

1735

Northern Ireland

£104,735

N/A

N/A

N/A

Scotland

N/A

N/A

N/A

N/A

Source: Land Registry of England and Wales, Crown copyright. The information above is based on figures provided by the Land Registry of England and Wales.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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6

Regeneration Programmes

Manchester pioneered inner city regeneration with the award winning transformation of former industrial areas such as Castlefields and Ancoats.

The City is in continual transformation with various initiatives underway in partnership with the Council, the RDA - One North West, English Partnerships and the private sector. Detailed information can be found at http://www.manchester.gov.uk/regen/. Major schemes currently underway include, The Northern Quarter, Spinningfields, East Manchester and Moss Side and Hulme.

Of direct relevance to The Three Towers is a regeneration scheme for the Irk Valley, which has the aim of developing a linkedlandscape of accessible ‘urban countryside’ sites. The Project aims to rejuvenate and regenerate areas of land within the Irk Valley catchment, ensuring that it develops as an important local environmental resource.

The River Irk travels down from the spine of the Pennine Ridge at Bacup, into the heart of the City Centre where it merges into the River Irwell at the foot of the CIS Tower. The Irk has been altered directly by human intrusion and land in the Irk Valley has suffered greatly over the years. After the Industrial Revolution, there was extensive economic and residential development. The Irk Valley was left scarred and neglected; much of the land was either left as wasteland or used for landfill. The River Irk itself was polluted, affecting the wildlife and recreational opportunities along its banks.

Some sites within the Irk Valley have predefined uses, such as playing fields, allotments and cemeteries. There are over 25 sites within the Irk Valley regeneration project area, covering over 250 hectares that are being targeted for environmental improvements. From large mature woodlands like Blackley Forest and Bailey’s Wood, to riverside walks.

In Partnership with Manchester City Council, Groundwork Manchester secured £2.4 million pounds from the Millennium Commission to carry out a programme of environmental improvements on sites in and around the Irk Valley in Collyhurst, which is in the direct vicinity of The 3 Towers, and will have a positive impact on the desirability of the location.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Section 4 under the heading “Shopping” also details the £20m retail improvement to the area with a new Tesco supermarket. 7

The Developer - Current and Future Projects

BRITANNIA MILLS, BOX WORKS, TIMBER WHARF, MOHO and BURTON PLACE.

Schemes currently on sale by Urban Splash include: •

BUDENBURG HAUS PROJEKTE, Bridgewater Canal in Altrincham

•

ROTUNDA building in Birmingham’s Bull Ring, refurbishment of commercial building to create apartments

•

LISTER MILLS in Bradford, refurbishment of industrial mill to create apartments

•

NEW

ISLINGTON,

Manchester,

29-acres

to

be

developed

for

mixed

use

www.newislington.co.uk •

Morecambe hotel (large-scale regeneration of waterside landmark)

The picture below lists all past and current Urban Splash developments around the UK (as at December 2005):

1993 - 1996

2004

MANCHESTER: Ducie House, Sally’s Yard, Schoolhouse, Smithfield Buildings

MANCHESTER: Moho, Albert Mill, Manchester Regiment, New Islington

LIVERPOOL: Concert Square 1997 - 1999 MANCHESTER: Britannia Mills LIVERPOOL: Old Haymarket, Collegiate, Matchworks, Tea Factory

BRADFORD: Lister Mills BIRMINGHAM: Fort Dunlop, Rotunda 2005 & BEYOND MANCHESTER: Langworthy, Springfield Lane TAMESIDE: Stalybridge

2000 - 2001

MORECAMBE: Midland Hotel

MANCHESTER: Box Works, Timber Wharf, Chorlton Park, Waulk Mill

WEST MIDLANDS: Walsall Waterfront

LIVERPOOL: 26-33 Old Haymarket, St Peter’s

WARRINGTON: Bewsey Old Hall PLYMOUTH: Royal William Yard BRISTOL: Imperial House

2002 - 2003

LEEDS: Parade & Drive

MANCHESTER: Burton Place

SHEFFIELD: Park Hill

ALTRINCHAM: Budenberg Haus Projekte

LIVERPOOL: Great George Street

PLYMOUTH: Royal William Yard

BIRKENHEAD: Pierhead Prospect

BRISTOL: South West Office

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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8

The Development location

Three Towers

Victoria Station

Deansgate

Piccadilly Station Project Team Architects Union North 57 Bold Street Liverpool L1 4EU 0151 709 6252 Construction Company Urban Splash Build Timber Wharf 16 - 22 Worsley Street Castlefield Manchester M15 4LD

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Unit Pricing A complete Schedule of units, sizes and prices can be found in the accompanying price list with this report, together with details of the “early bird discount” prices available prior to the public release. Apartment Specifications Exact specifications for the units are listed in Appendix 2. As the development is being built by Urban Splash, the units will have a modern, urban design with a high quality finish, fitted kitchens and bathrooms. All apartments will also have allocated parking spaces and 10 year Zurich Insurance. All internal specifications, including decorative finishes, kitchens and bathrooms, inclusive appliances, flooring, lighting etc will be made contractual. Typical floor layouts are shown in Appendix 1. Leasehold Information •

The apartments are leasehold for 250 years

•

The ground rent per annum is;

•

o

£150 for 1 bed units

o

£250 for 2 bed units

The management company is yet to be appointed, and therefore service charges have not been set.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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9

Investment Factors

Key Points This development has excellent medium to long-term capital growth prospects due to the following factors; •

The pricing makes the units highly affordable in the Manchester market and represent real value for money for investors

•

It is in close proximity to the City Centre, accessible by excellent public transport links for commuting to work, shops, leisure and entertainment

•

The Urban Splash design and interior finish is highly regarded with excellent brand recognition ensuring strong resale potential in the local market.

•

Individual units are spacious, well proportioned and designed with floor to ceiling glazed walls and a very high specification (especially for the price).

•

The high-rise buildings afford fantastic views over Manchester City Centre to one side and the Irk Valley to the other ensuring their attractiveness to potential buyers.

•

The Irk Valley regeneration (see section 6) will make this area unique in terms of the access to a ‘green’ recreational environment in the heart of the City

•

There is no stamp duty payable on any of these units at the stated prices.

Target Market Due to the competitive pricing, The 3 Tower apartments will appeal to both the investor and owneroccupier market and our marketing programme will target both and aim to achieve a 50/50 split; o

Investors – anticipated rental yield of up to 7%.

o

Owner-occupier – targeting people in the local market, either first time buyers, or apartment ‘upgraders’ from within Collyhurst and the surrounding area. Based on the typical buyer of an Urban Splash apartment, we expect the target market to be 25-45 year old professionals and trades people.

Finance There are numerous very competitive finance packages available for this development.

Contact Urban Exposure on 0207 763 7186 for further information.

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Investor Benefits and Purchase Terms 9.1.1.1 Criteria The key attractions for Buy-to-let investors are; •

Rental yields of between 5-7%.

•

Good capital growth potential

•

Low capital outlay

•

Attractive finance terms

Our research indicates that the anticipated rents are currently as follows; •

One bedroom apartments £500-£600 per calendar month

•

Two bedroom apartments £650-850 per calendar month

•

Giving gross rental yields of between 6%-7% on 1 bedroom units and 5-6% on 2 bedroom units

•

The predicted rental income is conservative; it’s based on current levels achieved in Collyhurst. The specification offered by Urban Splash will be higher and should eventually achieve higher amounts than neighbouring developments

•

Rental demand in Manchester City Centre is very good and there is an established rental market from young professional singletons and couples.

•

The City Centre is somewhat oversupplied at present with new build apartments and tenants are therefore spoilt for choice. The key benefit of this development is the value for money as rental levels here can afford to be up to 33 – 50% cheaper than a similar apartment in the city centre.

The yields, market potential and finance options make these apartments an excellent investment option in today’s residential market. 9.1.1.2 •

Investor Purchase Terms; An “early bird” discount to market value, offered for a strictly limited period only, to our existing investors only.

•

£1000 reservation fee

•

10% deposit on exchange of contracts with the balance due on completion

•

21 day exchange period

•

Assignable contracts may be offered subject to strict marketing restrictions for any re-sales prior to completion

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Owner Occupier Benefits and Purchase Terms 9.1.1.3 Criteria The primary factors that will appeal to owner-occupiers are; •

Affordability

•

Size, specification and layout of the units

•

Pleasant, safe neighbourhood and environment

•

Developer brand

•

Local amenities and excellent travel links

The development will satisfy these owner occupier desires, as highlighted in previous sections; 4 illustrates local leisure and tourism and shopping amenities and in particular the £20million boost to the area from the new Tesco store and associated improvements; 6 highlights regeneration of the Irk Valley to create a pleasant green environment; 7 highlights the developers brand recognition and product desirability in the area along with Appendices 1-3 show the specification and layouts of the units. 9.1.1.4

10

Owner Occupier Purchase Terms;

•

£1000 reservation fee

•

10% deposit on exchange of contracts and a further 5% deposit 6 months later

•

21 day exchange of contracts

Sources of Information

www.3towers.co.uk www.nwda.co.uk www.manchester.gov.uk www.visitmanchester.com www.neweastmanchester.com www.thenorthernway.co.uk 11

Disclaimer

Please note that any information we provide is based on current market conditions and research conducted by Urban Exposure. We cannot be responsible for future changes in the market or market conditions. All details in this report, including but not restricted to property details and property contracts and terms, should be checked fully by any interested party and their solicitor as Urban Exposure cannot be held liable for anything that is produced in this report. Any prices in this report are not intended as a formal valuation and should not be relied upon as such. No liability is given to any third party and the figures suggested are given purely for guidance. Mortgage applications are subject to individual status and no guarantees can be made that any particular applicant will obtain a mortgage on these properties or the value of the mortgage they will be able to obtain.

Investment report produced by Urban Exposure Ltd, April 2006. Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Appendix 1:

Floor Plans

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Appendix 2:

Apartment Specifications FINISHES, FIXTURES & FITTINGS Timber flooring to living room and kitchen areas Timber or carpet flooring to bedroom areas Linoleum flooring to bathrooms Painted plastered stud walls Painted plasterboard ceilings throughout Doors with stainless steel ironmongery SERVICES Telephone, TV and satellite points in living area and main bedroom Secure door entry system with video link to TV Intruder alarms Apartment-wide electric heating Electric water heating Dedicated space for washer/dryer KITCHENS Range of fitted base and wall-mounted units Worktop with waterproof splash back Built in containers for recycling Stainless steel monoblock mixer taps Stainless steel sink Electric oven, ceramic hob and extractor Fridge with freezer compartment BATHROOMS Modern white ceramic sanitary ware Chrome finish taps and fittings Large mirror Tiled/wood panelled walls COMMON AREAS Lift to all levels Recycling area on ground floor Secure parking for all apartments EXTERNAL FINISHES Timber Veneered cladding Aluminium double glazed windows Tarmac Car park ratio 1:1 Landscaping

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006

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Appendix 3:

Comparable Developments in Manchester

Off Plan Investment Opportunity: The Three Towers, Manchester Strictly Confidential April 2006 © Urban Exposure Ltd 2006