£154m construction project resumes weeks after Carillion collapse
Work on the £154m Angel Gardens build-to-rent development in Manchester is back on track following the collapse of Carillion a month ago.
The scheme is one of developer Moda’s £1.7bn pipeline of 6,000 rented homes in core cities across the UK, with projects ongoing in Manchester, Liverpool, Leeds, Birmingham, Edinburgh and Glasgow.
Angel Gardens was underway within two weeks of the Carillion liquidation after Moda engaged sister company Caddick Construction to take over the construction project from the failed giant.
Caddick has directly hired 20 former Carillion employees, while around 500 jobs on site have been secured, protecting around 30 sub-contractor companies previously working under Carillion.
Moda and Apache Capital had contingency plans in place since last summer and the swift resolution to the Angel Gardens scheme has ensured there will be no material impact on the project’s cost or delivery timeframe.
Caddick Construction will now act as construction manager and coordinate existing subcontractors across the 35-storey build to rent (BTR) project.
Carillion started work on Angel Gardens in January 2016 after Apache Capital and Moda agreed a record- breaking £85m BTR senior debt facility with Deutsche Pfandbriefbank.
Moda said the Caddick deal underlined the confidence it had in its resources as it looked to deliver the £1.7bn pipeline.
In Birmingham, Moda is building what will eventually be the city’s tallest residential building, the 42-storey 2one2 Broad Street.
The 481-apartment skyscraper is being developed on the site of the former Clicks nightclub by Moda Living as a build-to-rent scheme.
Andrew Parker, director of projects at Moda, said: “We have had contingency plans in place for some time and wanted to prioritise saving jobs, as we hugely appreciate the critical role played by the main sub-contractors and small businesses that support major projects.
“We have always remained close to the key sub-contractors and suppliers throughout the process and this has proved to be an essential part of the solution to keeping Angel Gardens on track.”
Adrian Dobson, commercial director at Caddick Construction, added: “The fast and effective takeover of this complex project is testament to the strength and depth of our team. We are fortunate that our construction team has been able to step in and take this project forward within two weeks and are delighted that so many key Carillion employees elected to join the group.”
Tony Brooks, managing director at Moda, said both Deutsche Pfandbriefbank and funding partner Apache Capital were fully behind the strategy.
“We are very disappointed by the Carillion collapse but we have been able to get the job back on track fast and keep the sub-contractors going with minimal disruption,” he said.
Johnny Caddick, director at Caddick Group, said: “Moda has significant projects across the UK which shall continue as normal. We expect to start on site with a further four high quality build to rent schemes this year in Liverpool, Edinburgh Leeds and Birmingham.”
Richard Jackson, managing director and co-founder of Apache Capital, said it had been critical to the investor that contingency plans were put in place last year.
“As soon as we became aware of financial difficulties of Carillion in summer 2017, we implemented our contingency plans to ensure that we protected the interests of our investors and banking partner PBB,” he said.
“As a result, no loss of money or time will be suffered, job security is ensured to former Carillion staff, financial security on this project is secured for our sub-contractors and onsite works have recommenced within two weeks to minimise delays and we will continue to deliver the project within budget.
“Given the adverse circumstances this is a phenomenal effort by the wider team and underpins the quality of our partnership with Moda and Caddick Construction.”