Manchester Airports Group (MAG) has selected a consortium including the Greater Manchester Pension Fund (GMPF), Beijing Construction Engineering Group (BCEG) and British-based Carillion to build the Airport City development.
Valued at around £800 million (€943 million; $1.3 billion), the complex will include 5m sq ft of offices, hotels, manufacturing, logistics and warehousing facilities. It is the centrepiece of the UK government-designated Enterprise Zone surrounding Manchester Airport, the country’s third-largest, and aims to bring more international businesses to the city.
The joint venture is due to start developing the site immediately, with an anticipated date of completion over the next 15 years. Carillion expects to deploy up to £12 million of equity in the development. GMPF and BCEG could not be reached before press time to confirm their respective stakes.
Argent, the developer behind the King’s Cross regeneration scheme in London and the Paradise Circus development in Birmingham, will be appointed by the consortium as development manager for the project.
The deal is consistent with GMPF’s ambition to put more of its money to work in infrastructure. The £11.3 billion pension fund increased its target allocation to 3 percent last year, which was reflected in a revised annual pace of target commitments to infrastructure funds from £60 million to £75 million. The institution is a known investor in vehicles managed by Global Infrastructure Partners, Meridiam Infrastructure, InfraRed Capital Partners and Impax Asset Management Group.
The Airport City announcement comes less than a year after Australia’s Industry Funds Management bought a 35.5 percent stake in MAG, as part of a deal that saw both companies acquire Stansted Airport for £1.5 billion.
It also comes as British Chancellor George Osborne wraps up a visit to China aimed at boosting trade and direct investments between both countries. It is expected that the talks will yield the signature of a deal allowing Chinese General Nuclear Power Group (CGNPG), a state-owned contractor, to build nuclear plants in the UK. The first project involving the company would likely be the construction of a third power station at Hinkley Point, Western England, in conjunction with French utility EDF.