Manchester's partnership with Abu Dhabi United Group (ADUG) has reshaped the city's east side, delivering more than 1,800 homes in Ancoats and New Islington. The deal, brokered with encouragement from the UK government, turned derelict land into sought-after neighbourhoods, but it has also raised questions about land values, affordable housing, and the transparency of decision-making.
The Manchester Life venture
The Manchester Life joint venture, established in 2014 between Manchester City Council and ADUG, has delivered homes across nine parcels of land in Ancoats and New Islington. A further 256 homes are in the pipeline. The properties are held by Abu Dhabi-owned entities registered in Jersey, where rental income accrues. A 2024 University of Sheffield study estimated the portfolio's gross value at almost £350m.
The council transferred leaseholds for six sites, receiving about £4.95m between 2015 and 2018, according to researchers' analysis of Land Registry records. This was followed by £2.9m in overage payments, which allow the council to share in returns above agreed thresholds. The council says it received an independently appraised land value of £5.2m and £2.9m in overage payments so far, describing this as an above-market return for land that had failed to attract market interest since the financial crisis.
Government encouragement and Project Falcon
The deal was not solely a local Labour project. In 2013, David Cameron's government established Project Falcon, a secret team of senior Whitehall officials tasked with encouraging UAE investment in Britain. The initiative was part of wider efforts to strengthen economic ties with the Gulf state amid austerity measures that had left councils with fewer resources.
Project Falcon created a "beauty parade" of projects to be offered to Abu Dhabi and recruited Tony Blair to act as a lobbyist. Three projects were identified for investment: a proposed investment in the University of Manchester's Owens Park campus, which fell through; the Graphene Engineering Innovation Centre, into which £30m was invested in 2014; and the Manchester Life joint venture, which saw investment in excess of £1bn.
Criticism and questions
Critics have argued that the council undersold prime city-centre real estate. The University of Sheffield report concluded that the council did not use its relatively strong bargaining position to maximise its share of development income. The researchers estimated the leasehold deals were about a third of the value of comparable deals in Manchester at the time and could have been sold for £17.3m.
Manchester Life has attracted criticism for delivering no affordable housing within the partnership itself. Council leaders argue that its impact should also be measured by the development it helped unlock across Ancoats and New Islington, including 413 affordable homes delivered through other schemes. Garry Bridges, who became council leader last month, acknowledged that the council's approach to affordable housing has changed since the partnership was established.
Sir Richard Leese, who led Manchester City Council for 25 years until 2021, remains unapologetic about the partnership. Asked if the council considered Abu Dhabi's human-rights record before the deal was signed, he said: "I can think of human rights issues all over the world and there are those who think the human rights record of the UK isn't that wonderful. The job of the council is very clear. We don't do foreign policy or negotiate with other governments. Our job is to do the best we can for the people of Manchester."
Public loans and ongoing scrutiny
Andy Burnham was present at two Greater Manchester Combined Authority meetings in 2017 when public loans worth more than £55m were approved for Manchester Life. The loans came from the region's Housing Investment Loans Fund. The GMCA stressed that the loans were approved collectively, not solely by Burnham, and that they were fully repaid with interest reinvested into housing priorities.
The Manchester Life agreement is now being struck off the council's register of significant partnerships, confirmed at a public meeting of the council's audit committee on October 13. Details around the closure and payment of overage due will be shared in a report for elected members and council officials in January, set to be marked as a 'Part B' document, meaning it will not be publicly available.
The council says nearly 4,800 homes have either been completed or are on the way in the area, with 60% delivered by other developers. Tom Stannard, Manchester City Council chief executive, said: "Manchester simply would not be the city we know and love today without the wide range of private-sector partnerships we have enjoyed over the last 30 years."
