The company that owns Birmingham’s Bullring shopping centre has taken over one of the biggest development sites in the city centre, next to the location of the proposed High Speed 2 rail station.
Hammerson, which opened the remodelled Bullring in 2003, has taken control of the six-acre Martineau Galleries site for an undisclosed sum, believed to be about £28m.
The site, in the rundown Eastside part of the city centre, first received outline planning consent in 2006 for a £550m mixed use development. Today it comprises a group of dowdy 1970s buildings, including shops, offices and multistorey car parks.
Hammerson was already a part-owner alongside Land Securities and the Pearl Group, but decided to buy out their interests after putting the property up for sale in May.
By buying out its partners, Hammerson protects its Bullring investment, analysts say.
“There’s consented planning for 85,000 sq m, 915,000 sq ft of retail, and that’s really why Hammerson didn’t want anyone spoiling their party at the Bullring,” says David Smeeton, director with Colliers International.
But the deal also gives it a key role in the regeneration of the HS2 site, centred on the old Curzon Street station, where work is due to start in 13 months.
“Birmingham can’t seem to keep itself out of the news at the moment. But this is the most exciting opportunity, and such a key site. Strategically it’s right on the doorstep of HS2,” says Mr Smeeton.
The city council’s master plan for the 140 acre Curzon Street regeneration area published last year envisages prime mixed use development for Martineau Galleries, including “grade A office space immediately opposite Birmingham Curzon station”.
Liz Peace, recently appointed chairman of the Birmingham Curzon Urban Regeneration company, says: “We’re looking to make sure it turns into a real area with character, not a soulless regeneration project.”
The district was once known as a poor Irish neighbourhood — indeed Scruffy Murphy’s public house is one of the Martineau Galleries assets. Ms Peace, a former head of the British Property Federation industry group, recalls as a child in Birmingham “it was not an area a nice girl went”.
But she says: “In a funny sort of way the recession has done us a favour because it meant that bits of the Eastside site were not developed. So we’ve actually now got an extraordinary piece of land where you can put the station and you can look at what you can put around it.”
Hammerson, by far Birmingham city centre’s biggest private sector investor, credits the council with pushing infrastructure such as the city tram system.
Robin Dobson, the company’s director of retail development, says the city has been prepared to make risky investments, including buying the Pallasades shopping centre site at New Street station, now redeveloped as Grand Central, with John Lewis as its anchor tenant.
“Particularly in the recession, public authorities have an increasingly important role to show confidence in their cities and towns,” says Mr Dobson.
“Birmingham council has demonstrated that very well — putting your money where your mouth is, so to speak. A lot of cities talk but Birmingham has actually done what they said they were going to do.”