Manchester City Council has received nearly £3m from Abu Dhabi land deal

Nearly £3m paid under deal tied to east Manchester developments

Manchester City Council has received just under £3m from an agreement to share in profits generated by developments on council-owned land by Manchester City’s Abu Dhabi owners. The arrangement, agreed in 2014, requires payments when profits from projects in Ancoats and New Islington pass a set threshold. The council says it expects another payment.

The deal was part of Manchester Life, a partnership between the council and Abu Dhabi United Group (ADUG), the company owned by Sheikh Mansour bin Zayed Al Nahyan. Under the partnership, ADUG could lease development sites in east Manchester, near the club’s stadium. An overage agreement gave the council a share of certain gains if the value or profits from the land rose beyond an agreed level.

Researcher questions transparency of terms

Adam Leaver, co-author of the University of Sheffield’s 2022 Manchester Offshored report, said the arrangements’ confidentiality made it hard to assess whether the council obtained the best value. The report estimated that about 10 acres were transferred into Manchester Life’s control and that companies ultimately owned in Abu Dhabi had made roughly £112m in property sales.

Leaver told the BBC that limited information about profits routed through connected companies registered in Jersey meant it was not possible to compare the council’s return with ADUG’s. He also said the terms were not publicly available, leaving outsiders unable to establish the level of profit that would trigger a payment. “So we can’t compare how much profit was received by the council relative to their ADUG partner,” he said.

The council said reviews of its management and monitoring of overage agreements had identified “weaknesses in documentation, monitoring and assurance, particularly around historic overage arrangements.” It defended the Manchester Life agreements, saying the deals were made after the financial crisis, when there was “very little market interest in the area”, and that independent experts valued each parcel of land before the council agreed terms.

Council points to homes, businesses and regeneration

The original Manchester Life plan envisaged more than 6,000 homes and up to £1bn of investment over a decade. The council says the partnership has delivered about 1,500 homes across nine sites as part of a £1.25bn regeneration programme, with hundreds more homes under construction. It says the council’s overall payment equates to about £26,000 per home and represents an above-market return on land that had struggled to attract investment after the 2008 financial crisis.

The council also cited the preservation of two historic mills, 30,000 square feet of commercial space and the arrival of independent businesses. It said more than 3,400 homes have been completed in the wider area by a range of developers, including social-rent and affordable homes.

Leaver disputed the suggestion that the sites had lacked development interest throughout the period leading up to the partnership. He said investment and activity in Ancoats had picked up from 2013, with new businesses and projects pointing to rising land values and a market beginning to recover.

Deal returns to scrutiny amid Premier League case

The council’s relationship with ADUG has drawn renewed attention following the Premier League’s findings against Manchester City. The league said the club was guilty of 115 charges, including allegations concerning a disguised-funding scheme; the club denies wrongdoing and has appealed. The BBC report said the alleged scheme involved more than £800m of owners’ funds topping up sponsorship and commercial deals.

Sir Richard Leese, who led the council when the agreements were struck and is now Manchester City’s honorary president, told the BBC that Abu Dhabi investment had created value for the city. Leaver said his own conversations suggested there had already been interest in developing the land. Andy Burnham, who was Greater Manchester mayor before entering Downing Street, has said he will publish details of his dealings with the club and its owners during his time in the role.