The Chamberlain News

MIPIM16: M&G to fund Three Snowhill, £500m Smithfield plan launched

M&G Real Estate, one of the UK’s largest property investors, is to fund the construction of Ballymore’s Three Snowhill, a 420,000 sq ft office development in Birmingham city centre.

The £200 million scheme will be the largest ever speculative city centre office scheme built outside London and news of the funding deal was welcomed by Chancellor George Osborne:

We want to make the Midlands Britain’s engine for growth and this landmark announcement will play an important part in that plan.

Not only will this project initially create hundreds of important construction jobs in Birmingham, the resulting space will play home to businesses with thousands of valuable jobs right in the heart of the Midlands – a vital step in us rebalancing the economy in Britain.

Confirmation of M&G’s involvement was confirmed at the MIPIM real estate fair in Cannes, where Greater Birmingham has its biggest ever presence.

Alex Jeffrey, Chief Executive, M&G Real Estate, adds:

Demand from both domestic and international businesses to secure high quality office space in Birmingham has significantly increased, and this is set to rise further with planned infrastructure improvements such as HS2’s Phase One confirmed to start in 2017.

While occupier demand continues to outstrip supply and push prime rents upwards, Three Snowhill will benefit from low vacancy rates and support our strategy to provide our investors with long-term income-driven growth.

Three Snowhill is an Enterprise Zone site and is a key development within Birmingham’s Snowhill Masterplan.

On completion at the end of 2018, it will comprise 385,000 sq ft of office space and 35,000 sq ft of retail and leisure, housing around 4,000 workers.

The deal follows M&G Real Estate’s acquisition of Two Snowhill in 2014 and forms the next stage of Birmingham’s wider Snowhill masterplan, which has transformed the northern end of Colmore Row to become the prime location for offices in the city centre.

Ballymore’s Chief Executive, Sean Mulryan, said:

Working with the City, our funding partner, M&G Real Estate, and our main contractor, BAM, we will deliver a landmark building and the final element of what is one of the largest and most prestigious commercial developments in Central Birmingham. 

Ballymore committed to Birmingham and the Snowhill scheme over 10 years ago. That long term commitment has resulted in the successful transformation of Snowhill into a new and thriving business district – already home to some of Birmingham’s largest office occupiers, including KPMG, Barclays, Gowling WLG (formerly Wragge & Co) and the HS2 Construction Headquarters.

The deal was welcomed by John Clancy, the leader Birmingham city council:

This is great news for Birmingham and builds on the city’s now established reputation as a leading centre for the business, professional and financial services sector.

We’re the UK’s most investable city and, with the Masterplan for Snowhill providing a bold vision for replicating the success of places like Canary Wharf together with the £1 billion plus being invested in local infrastructure, it is clear that Birmingham’s attractiveness as a location to invest will continue to grow.

Also at MIPIM, Birmingham has launched a £500 million plan to develop the 14 hectare site around the wholesale markets, now known as Smithfield.

A council spokesperson said:

The offer will include fantastic new retail markets, leisure uses, cafes, independent shops, restaurants and hotels, space and buildings for cultural events and activities and exciting modern living. This will all be set within an innovative and exemplar sustainable environment.

The plans will see over 300,000 sq. metres of new floorspace created, 2,000 new homes and a series of new squares, parks and gardens and is set to bring in a further £500 million of investment, 3,000 jobs, millions more visitors and £470m in additional GVA.

The redevelopment will capitalise on the area’s heritage, focus for retail markets and proximity to some of the city’s most important economic assets.

The council described the site’s connectivity as “unrivalled”, close to New Street Station, used by more than 51 million people a year, and the high-speed HS2 terminus at Curzon only a short metro journey when it opens in 2026.

At the heart of Birmingham Smithfield will be a new home for the city’s retail markets. The plans will also include space for start-ups, small businesses and entrepreneurs harnessing the city’s creative talents and driving new economic activity.

Pedestrians and cyclists will be at the centre of the developments new routes with wide pedestrian boulevards and new streets reconnecting the area to the wider city centre.

Festival Square will become a major new public space for the city and a focal point for the site. As a meeting place and exciting hub for festivals and cultural events it will bring the area to life with new cultural buildings, the home of the markets and hotels and commercial space all focused upon it.

A new modern residential neighbourhood will be created with a mixture of 2, 3 and 4 bed apartments. At the heart of the new community will be a major park adding to the city’s expanding network of green spaces to create what will be one of the most desirable places to live in the city centre.