The ship comes in
Estates Gazette
20/11/2004
With assets totalling £2.5bn, Peel Holdings is busy planning for the future of the Manchester Ship Canal. By David Quinn
The office of Peel Holdings, one of the UK’s largest landlords and property developers, is perched in what a helpful assistant calls “Peel Dome”, high above the consumerist temple that is the Trafford Centre.
Once inside, there is a conspicuous lack of mahogany panelling, shag pile carpet and the other various trappings associated with mega-landowners of the sort Peel undoubtedly is. Lest we forget, this is a company with assets totalling £2.5bn, whose majority shareholder, John Whittaker, is thought to be worth £929m, which puts him at number seven on this year’s EG Rich List.
On entering one of several boardrooms, one is confronted with a couple of huge maps illustrating Peel’s landholdings. On one side, a plan shows that the company owns virtually everything along the Manchester Ship Canal.
It is undoubtedly a lot of land, and that’s only a small portion of it. The company owns 20,000 acres of land and 5m sq ft of investment property across the UK and in Bermuda, the Bahamas and Spain.
The famous purchase
“It’s been built up with acquisitions over the past 20 years,” explains director Ed Burrows, who has been with the company for the past 17 years.
“We do buy and sell land, but large acreages have been acquired by purchasing other companies.”
The most famous of these purchases was Peel’s acquisition of the Manchester Ship Canal Company in 1987.
But the firm hasn’t just sat on its landholding, having invested over £300m in the Ship Canal and its environs during the past 12 years. Add to that the £350m the firm has thrown at the Trafford Centre and a further £300m invested by the centre’s occupiers themselves, and you have a total of well over £1bn invested in the Ship Canal Corridor, all spurred by Peel.
The company has further plans for the corridor in the shape of Port Salford, a proposed multimodal freight terminal on a 200-acre brownfield site close to Barton Airfield in Irlam. Salford council is considering the proposals.
At the eastern end of the Ship Canal sits Salford Quays, where Peel owns most of the remaining development land. The company’s latest plan for the area is the 15-acre Quays Point. Peel already has planning permission for a 1m sq ft office and residential development on the site, which is opposite the Imperial War Museum North. It plans a “Third Grace” landmark building to complement the Daniel Libeskind-designed Museum, and the Lowry.
“Salford Quays has a parallel with London Docklands,” says Burrows.
“It has a similar relationship to Manchester city centre as Docklands has to the City of London: similar facilities, and Metrolink tying it to the city.”
The other major site at Salford Quays is known as Pomona and is a 26-acre plot at the eastern end of the quays. Peel has submitted an application to develop 500 flats. It will not build these itself.
As with Quays Point, once Peel has obtained planning permission, it will sell to a residential developer. Crosby Homes, City Lofts and Millennium have recently bought large plots from Peel in this way, and are at various stages of development. At the moment, Peel has no plan to cut out the middle man and go into residential development itself.
“Peel doesn’t build houses,” says Burrows. “That’s a specialist market. Our policy is to maximise planning permission on a site, then sell it on.”
But Peel is a sophisticated landowner, having realised the potential of a long-term approach. It has donated £12m, plus a significant landholding, to the Imperial War Museum North, as well as in excess of £5m of land to the Metrolink tram system. These may seem generous acts, but the fact that these two projects have led to a huge increase in visitors to the area, as well as improved national and international perceptions of Salford Quays, has caused a huge growth in land values.
The long-term view
Perhaps Peel’s commitment to the long haul was behind Whittaker’s decision to take the company private in August. Although Burrows prefers not to speculate on the reasons, he does say: “The company has always had a long-term view.”
Whittaker is said to be a very “hands on” chairman who takes a strong interest in the day-to-day affairs of the business. He has four children, three of whom work for the firm. The other is expected to join after graduating from university. The eldest is Mark, who has been with Peel for 10 years. He is in charge of the Peel Investments wing of the business, which holds and trades a mixed portfolio of property across the country, and has an annual rental income of £40m.
He is responsible for letting Venus, the 91,500 sq ft office building the firm has developed in an area it is calling Trafford Quays, opposite the Trafford Centre. Half of the building was let earlier this year to medical supplies company SSL International.
“We see Trafford Quays as a new business location. We’re trying to create a mixture of uses between offices and leisure, and that’s why we developed Venus,” says Whittaker.
“The strength of the location lies in the fact that we have secured a 45,000 sq ft letting within three months of practical completion. We want to continue to strengthen Trafford Quays in response to market demand.”
At present, much of the land around Trafford Quays does not have the relevant planning permission to permit Peel to embark on this project, but the firm is hopeful it won’t be long in coming.
Peel also recently launched Peel Business Parks. Around 2,000 acres of land have been siphoned off into this venture, much of it located near the four airports the company owns in Liverpool, Teesside, Sheffield and at the former RAF Finningley, also known as Robin Hood Doncaster Sheffield Airport. However, there are 20 different sites in total, in areas as diverse as Wakefield, Ellesmere Port and the M3 corridor.
Matthew Fitton, property development manager, who is tasked with developing the business parks, says: “It’s a case of pulling everything together under one brand. We’re currently working to label everything up over the next 18 months.”
Fitton says Salford Quays has been excluded from the Peel Business Parks exercise, although Port Salford, if given the go-ahead, will fall under the new umbrella.
[BOX]
The Peel Empire
Land and property Includes Peel Investments and Peel Business Parks. Schemes include Salford Forest Park, a £100m scheme on the drawing board, which could see horse racing return to Manchester. Also includes land at Salford Quays, the 1.4m sq ft Trafford Centre, Trafford Quays, Port Salford and Gloucester Quays
Peel Ports Includes the Manchester Ship Canal, Clydeport (Scotland’s only Atlantic-facing port), and the Glasgow Harbour Development
Peel Airports Liverpool John Lennon airport, Teeside International airport, Sheffield City airport and Robin Hood Doncaster International airport at the former RAF Finningley airbase
Total holdings 5m sq ft of investment property and 20,000 acres of land worth £2.5bn
Tags: liverpool, manchester, peel, salford
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