In Conversation With…Mike Horner, regional director of Muse Developments

A CASUAL glance at Muse Developments’ current project list in the North West would seem to indicate that the firm already has plenty on its plate without looking to entangle itself into more potentially problematic developments.

In Blackpool, it is still remodelling a major town centre scheme that has had to plug a £20m hole caused by the cancellation of NWDA funding while in Manchester it has been held up with a project to bring new offices to Manchester Victoria station by a mix of market conditions and a stand-off between the City Council and its development partner Network Rail over funding for station improvements.

Moreover, as the development partner leading English Cities Fund’s transformation of Central Salford, it is currently working through a huge compulsory purchase order for chunks of land in Central Salford and there are a nuimber of other projects within its portfolio on which many of its team have been plugging away for more than a decade.

Yet Mike Horner, regional director of the Salford Quays-based company, said that more of his time was being taken up looking to secure new projects as opposed to working through existing schemes.

“We perceive that now is a good time to be out there to secure partnerships and land agreements to replenish the stock that we’ve been developing through over the past couple of years,” he said.

He said that the firm had benefitted from a portfolio approach, with projects in various phases of development. Results from parent firm Morgan Sindall last month seem to vindicate this.

The company’s urban regeneration division (of which Muse is its principal part) show a 44% increase in turnover to £46m and a hike in operating profits from £700,000 to £2m.

Any developer who is keeping their heads above water and making money in what is a difficult market must be doing a good job,” said Horner. “There have been plenty of our peers who have strugled to do that.

“I’m sure 2011 will continue to be challenging but we’re up for it in the same way as we were last year and confident we’ll hit our targets.”

In Blackpool, for instance, he envisages that after the blow of losing the large public sector support for the scheme it has knuckled down with attempting to deliver a revised scheme where planning will be submitted later this year,

“What we’ve managed to do is earmark part of the masterplan for phase one which is going to comprise the foodstore, a new building for Blackpool Council and a refurb of an existing car park which is owned by the council.”

He said that by bringing the foodstore into the initial phase, which will also include infrastructure and public realm improvements, it can be delivered without any public sector support.

“That gets us off to a very good start and it gets some 300,000 sq ft of development underway and will make a massive change to the Talbot Gateway area of Blackpool. It will provide the transformal change that we hope will then kickstart further phases of development.”

Horner said that all four of the major supermarket chains were keen to run the foodstore, which will be next to Blackpool North station. A preferred operator has already been chosen and a start on site is likely next year.

“The council are hugely supportive of the scheme and any initiative to encourage investment in the town is massively welcomed.

“This really is going to be a welcome injection of private investment in the town which will be the first steps towards a major regeneration over the next 10-15 years.”

In Manchester, Muse is finally beginning to work up plans for 500,000 sq ft of office-led space at the Fishdocks site fronting Victoria Station, which is currently a surface-level car park.

The scheme has suffered partly from the station’s own delays, but the economic climate has not helped and there were also lengthy negotiations with The Co-operative about basing its headquarters there.

However, Horner believes the delays have not harmed the scheme’s long-term prospects.

Although the end value of the scheme “will probably be in the order of around £225m” compared with £300m touted towards the end of the boom, the subsequent cessation of Grade A office development in the city and development plans for surrounding buildings like Urbis and the Co-op’s legacy estate mean that Muse is bringing the scheme forwards at the right time, he argues.

“It’s a very exciting scheme and one which both ourselves and Network Rail feel the timing could not be better to secure planning and commence development,” he said.

“We’ll be liasing with keystakeholders in the area with a view to submitting a planning application for the site in 2012.”

At Salford, it is currently helping the City Council with its mammoth Compulsory Purchase Order – the early part of which will focus on the redevelopment of land on the opposite bank of the Irwell to Spinningfields where there are plans for an office-led scheme consisting of a series of high-rise buildings.

“The plan is to lead with the commercial space, because it is within a stone’s throw of the prime Spinningfields central business district and has the scope to extend it further across the river.

“It’s a very exciting project for us and for Salford City Council. It’s the type of project that Muse is capable of delivering but they’re not overnight. They’re two, three and four years in their preparation, which is something we’re used to.”

In Tameside, for instance, the firm has been developing out the Ashton Moss scheme for the past 12-13 years. A bid for cash for the scheme was submitted in the first round of Regional Growth Fund bids, but Horner said the bulk of the work had already been done at the scheme.

Some 1m sq ft has been developed – including two hotels, a leisure park with multiplex cinema and bowling alley, major warehousing units and a supermarket.

“There’s a few plots remaining there for potential further warehouse/distribution and a plot of four acres for leisure/showroom use. We’re fielding enquiries and will be looking to develop out the remainder as soon as we can get a pre-let,” he said.

Overall, though, he admits that out-of-town projects have become more difficult to deliver, particularly as banks seem set against lending on speculative development.

“It’s relatively subdued but it will come back and the trick is providing the right quality of buildings in the right location at the right price. Once banks start lending again I’m confident we’ll see demand for that type of product again.”