x Abu Dhabi, UAESaturday 22 July 2017

England's Premier League football clubs score in the property market

EPL football has found a rich new source to tap – the neighbourhood. By redeveloping or moving into new stadiums, clubs are also entering the property market and reaping the benefit - with gallery.

Arsenal: Highbury in north London was sold in 2006 to developers. Bloomberg News
Arsenal: Highbury in north London was sold in 2006 to developers. Bloomberg News

Far from the roar of the crowds, England's Premier League football clubs are scoring goals in the property market.

Manchester City and Arsenal are involved in redevelopment schemes around their current and former stadiums, including both commercial and residential projects. And regeneration opportunities are playing a key role in the debate over Liverpool's proposed plan to build a £300 million (Dh1.8 billion), 60,000-seat stadium at Stanley Park.

"Any of the clubs in the Premier League playing in a historical facility will be looking at ways to enhance that going forward," says Patrick Grincell, a director of Savills, the property company.

The property business is already having a direct impact on the pitch. Arsenal was able to increase the budget for players' salaries by £4.5m last season thanks to sales of apartments at Highbury, the site of its old stadium, says Ivan Gazidis, the club's chief executive.

After abandoning Highbury in 2006 for its new Emirates Stadium, the club built a mixed-use development at Highbury with 665 apartments. Almost all of them have been sold, as demand for property in London continues to grow, despite the global financial downturn.

"Many of these clubs are looking at this model and seeing how they can replicate it," says Mr Grincell.

Manchester City is in the early stages of a £1bn redevelopment scheme for land surrounding its stadium. Plans call for a mix of retail, office and hotel space, in addition to a variety of sports facilities.

The club is seeking public reaction on the first phase of the development, which includes a football academy, pitches, a training centre, offices and a 7,000-seat stadium, all designed by the architect Rafael Vinoly. The 32-hectare site is currently covered primarily by old and abandoned buildings and empty lots.

"It will turn from being a dreary part of the city to a place that people want to go," says David Lathwood, the regional managing partner for King Sturge, a property company. "It's part of the city they have been trying to regenerate for years."

Areas around older sports stadiums are rarely considered attractive neighbourhoods. Except for retailers and hotel operators, the crowds and parking issues surrounding a stadium are often viewed as a negative, particularly for residential developments.

But football's glamour teams are proving an exception.

"When they have improved their facilities and created a destination, there is demand from the market," Mr Lathwood says.

The average house price in the postal districts of the current 20 Premier League teams jumped 168 per cent in the past 10 years, from £132,405 in June 2001 to £353,408 last June, according to a study by Halifax, a property lender. That is 50 per cent more than increases for the rest of England and Wales.

The biggest increase was recorded in the area surrounding Manchester City's Etihad Stadium. Since the stadium opened for the Commonwealth Games in 2002, prices in the neighbourhood have increased by 350 per cent, Halifax found.

Five of the six biggest increases in values in the study were around stadiums built in the past 15 years - Manchester City, Sunderland, Swansea City, Bolton and Stoke City. Values around Arsenal's Emirates Stadium rose a relatively modest 102 per cent in the decade, but jumped 22 per cent in the past year, the largest increase among the Premier League teams, Halifax reported.

New stadiums usually mean improved shopping, pubs and transport links, which bump property values, says Suren Thiru, a Halifax housing economist.

For the teams, property projects are also playing a key role in financing plans for new stadiums.

"What they find is stadiums come at a big cost," Mr Grincell says. "Invariably there is a need for some form of enabling development."

"Barriers" in redeveloping land around Anfield stadium, including land acquisition costs and regulatory matters, are among the issues driving Liverpool towards developing a 60,000-seat stadium at Stanley Park, which has been in the works for nine years.

The fate of the negotiations will have direct implications for regeneration schemes around both the current Anfield site and Stanley Park.

"It's disappointing that based on where we are at the moment, we seem to be unable to press on with the more viable economic option of a refurbishment [at Anfield], but we remain committed to finding the best possible long-term solution," says Ian Ayre, Liverpool's managing director.

West Ham, relegated from the English Premier League last year, hopes its redevelopment of Upton Park, its current stadium site, will help to pay off debts and finance its move to London's new Olympic Stadium in 2014.

Even though the deal for the club to take over the stadium is still in doubt after London rivals Tottenham Hotspur filed an appeal against the decision, West Ham has already started to solicit private developers to build homes at Upton Park.

If Tottenham fails to win its appeal for the Olympic site, the London mayor Boris Johnson has offered the club £8.5m to help to redevelop the stadium and neighbourhood at White Hart Lane.

A new stadium would help to "regenerate a much wider area in this neglected and impoverished part of London", says a spokesman for the mayor.

kbrass@thenational.ae