MediaCityUK, co-starring ING
MediaCityUK in Manchester, UK, is a dedicated mixed-use hub for the creative and digital sectors, developed by The Peel Group, one of the UK’s leading infrastructure, real estate and investment companies. ING Commercial Banking, Real Estate Finance participated as joint mandated lead arranger in a five-year GBP 325 million refinancing loan by a syndicate of banks.
The UK’s creative industries are among the fastest growing and most successful of its economy. They include sectors as diverse as advertising, design, fashion, film, music, performing arts, publishing, software, TV and radio, to name a few. Together, they are estimated to be worth over GBP 71.4 billion each year and employ more than 1.5 million people, according to the UK government’s Department for Culture, Media & Sport.
Over the years, there have been a number of public and private initiatives aimed at supporting these activities and creating a business environment that is globally competitive in terms of infrastructure, talent and tax incentives. One of the most significant developments has been the construction of MediaCityUK, a dedicated mixed-use hub for the creative and digital sectors, located on the banks of Manchester's historic Ship Canal.
Global media hub for growth
The development, which opened its doors in 2011, is home to more than 200 businesses that are part of a cohesive creative community. It includes several large corporate tenants such as the BBC, ITV, dock10, Satellite Information Services and the University of Salford, in addition to a mix of restaurants, bars, leisure and retail outlets, apartments and a new Holiday Inn hotel.At its heart, is a piazza and landscaped park that stretches out to the canal, around which the main buildings are located.
The scheme was developed by The Peel Group, one of the UK’s leading infrastructure, real estate and investment companies, with a diverse network of businesses that include ports, airports, leisure facilities, media infrastructure, hotels, wind farms, shopping centres and investments in major public companies.
"This is not about Manchester, and it is not even about the UK. MediaCityUK is about creating a successful global media hub for the long term."
“MediaCityUK is where the next great innovations will hopefully be born,” says Stephen Wild, Managing Director of MediaCityUK. “We want it to be the place of choice for successful businesses to grow in and link up with the tremendous educational talent that is also based here. This is not about Manchester, and it is not even about the UK. MediaCityUK is about creating a successful global media hub for the long term.”
While the site was designed around the specific needs of the creative and digital industries, it has also made headlines because of its forward-looking approach to sustainability. MediaCityUK has gone above and beyond best practice requirements for environmental protection, and has embedded sustainable solutions into each stage of its development: design, construction, and operations.
Sustainable value creation
“Not only is sustainability important because it is part of our values as a company, we also believe that a truly sustainable community for MediaCityUK will translate into a more robust asset value and better marketability,” explains Wild. “We have looked to achieve a sustainable development in terms of the physical infrastructure, but also post-occupancy, we have worked to increase efficiencies and sustainable behaviours in an open and collaborative way with the community.”
In 2010, MediaCityUK became the first development to receive a BREEAM Communities Masterplan Certificate for its sustainability standards, and was given the world’s first ‘BREEAM Sustainable Communities' award for its detailed environmental planning. In 2013, Peel Media won the ‘Sustainability and Environmental Impact’ award from the British Institute of Facilities Management, in recognition of the steps taken to minimise the high environmental impact that is typically associated with facilities serving creative and digital industries.
For example, MediaCityUK uses a combined heat and power (CHP) engine to generate electrical power. The heat that is generated, which would be lost in a conventional system, is recovered as hot water and circulated around the complex. The system results in GBP 560,000 in energy savings and a 29 percent reduction in CO2 emissions.
“We have a deep understanding of our sector and its high power requirements in key media assets like data centres,” says Wild. “So we made a conscious decision to see these things as opportunities to act differently, whereas some developers would see things like these as challenges.”
A true financing partner
In 2013, Peel Media (Holdings) Limited (the Peel company behind MediaCityUK), asked ING Commercial Banking, Real Estate Finance to join a syndicate of banks as joint mandated lead arranger for a five-year GBP 325 million refinancing loan to MediaCityUK. It was a new relationship, made possible by a referral from international investor Olayan Group, one of The Peel Group’s major shareholders, and a longstanding client of ING.
“We met their credit approval timeframes and finalised the facility documentation process in a quick and efficient way. That has always been one of the strings in our bow and it makes us competitive in the market,” says Diane Wonfor, Real Estate Finance at ING Commercial Banking in the UK. “What we also found is that we share Peel Media’s values and aspirations, and I think this has helped to create a very supportive and understanding relationship.”
MediaCityUK’s Stephen Wild agrees: “We have a lot of funding options available to us, but what we look for are financing partners that share our ethos. Our interaction with ING was hugely positive in that regard. There was always a good interface with their credit risk team, and we found their comments and questions to be pertinent and insightful. By demonstrating that they understand our investment and our sector, they allowed us to decide very quickly that this deal was something for them.”
"We now have an exciting new relationship with a high quality sponsor that shares our sustainability ambitions."
For Peter McAnally, Managing Director Real Estate Finance at ING Commercial Banking in the UK, the deal has been particularly rewarding because of the unique qualities of Peel Media and MediaCityUK. “We now have an exciting new relationship with a high quality sponsor that shares our sustainability ambitions,” he says. “MediaCityUK is an exceptional location that has outstanding assets, and it has given us a good profile in markets outside London and more diversity and granularity in our book.”
Looking ahead, planning is already underway on MediaCityUK’s next development stage – it could ultimately expand over an area of 200 acres in the next 20 to 30 years, depending on the demands of the media and creative sectors. “We are continuing to grow MediaCityUK and expand in the immediate vicinity,” says Wild. “I’ve seen the designs for a new office and hotel building we’re preparing for the site, and I look forward to discussing these with ING one day.”