This is your life change
When John Milligan arrived home from work and switched on the TV he had no idea the following half-hour would be a life-changing experience. After flicking through channels he settled down to watch an episode of This is Your Life, the subject of which was Tim Smit, the driving force behind the Eden Project in Cornwall.
The programme revealed how Smit had created one of the UK’s biggest tourist attractions despite friends and family describing his plans as “mad”. Milligan realised that after 18 years building Jones Lang LaSalle’s retail department into one of the most successful in Europe, he still felt unfulfilled. Nearing his 45th birthday and approaching what he describes as a “mid-life crisis”, he realise that he wanted to deliver his own projects rather than earning fees for other people.
Almost a year later Milligan is set to unveil his first venture: the £4m revamp of the £45m 150,000 sq ft (13,935 sq m) Triangle scheme in the heart of Manchester city centre.
After quitting JLL and setting up on his own, Milligan approached the wealthiest people he knew: Joey Kaempfer of McArthur Glen and the entrepreneurial brothers Don and Roy Richardson. He had helped Kaempfer and BAA’s Barry Gibson put together the BAA McArthur Glen factory outlet vehicle which, in seven years, built 13 centres across Europe and was worth £750m. The Richardsons, with whom Milligan had worked on the Manchester Printworks, also bought into the factory outlet deal after he introduced them to Kaempfer.
Milligan wanted to replicate the success of this vehicle and he persuaded the Richardsons and Kaempfer each to take a 15% stake in his new venture. With financial backing secured he started to work up plans to build shopping centres from scratch and consulted Barry Gibson and consumer trends specialist Bob Tyrrell.
Inspirational
“I realised that I wanted to be in the business of creating places where people want to be and in which they are inspired to shop,” says Milligan.
He explains that the retail market is polarising between the convenience end, whereby retailers use the internet and supermarkets strive to deliver goods quickly and cheaply, and the trend for people going out to enjoy themselves in a retail environment where they don’t have a particular purchase in mind.
“It is at that end of the market that we want to operate to add value and create things,” adds Milligan. “We realised that around 75% of these operations within the UK were neither easy to get to nor offered a great experience, and that’s where we think there is a role for us.” The first opportunity to put this theory into practice came two weeks before he was due to leave Jones Lang LaSalle in 2002. At the time Milligan still had his heart set on developing from scratch, but then he took a call from the US private equity firm Blackstone Group, which informed him that it had set up a $1.3bn (£806m) fund for European property and that it wanted to get into retail.
Blackstone asked Milligan if he would be willing to help it secure the purchase of the Triangle from Frogmore and then run the asset. “On the one hand I wasn’t keen as I wanted to develop my own thing,” he recalls. “But on the other, it was a reasonable deal we were being offered, so all of a sudden I had an asset to manage before building anything.”
Milligan created a company called Retail Resorts International and set about employing a close-knit team of former colleagues and highly respected industry players. He approached Mark Morgan, with whom he had worked closely at JLL and who had a raft of asset management experience through overseeing a £650m portfolio for leisure operator MWB. He persuaded Morgan to join as a director and shareholder and went on to employ Samantha Chown as head of marketing. Mel Taylor on the leasing side who was taken on to build relationships with retailers, McArthur Glen’s former head of leasing, Liz Jeffrey who took on the role of business director and Adrienne Jones as head of research.
Skills Base
“With that combination of skills we had a group of people who were well equipped to run an asset like Manchester,” says Milligan, who explains that he sanctioned the purchase of the Triangle because it as a “great location that could only get better”.
Its prime position is clear once the scheme’s neighbours are considered. Directly opposite is the 120,000 q ft (11,148 sq m) Selfridges store. It is flanked on either side by Prudential’s Shambles scheme which is anchored by Harvey Nichols, and the Arndale extension where Next will open its first 150,000 sq ft (13,935 sq m) department store.
“When we took it on we knew that the centre had not been a success but we didn’t quite know what to do with it,” says Milligan. “But we thought if the location was going to get even better “ which it clearly was with the opening of Harvey Nichols and Next “ then we could work out what to do with it.”
Top of the list of things to do was sort out the “schizophrenic tenant mix” which Milligan describes as being “too many things to too many people”. The centre hosting the UK break dancing championships last year illustrated this. After the event Milligan received a raft of letters from occupiers that he split into two piles: one pile from what he describes as the “Cheshire set” retailers who complained about the event and the other from younger, more urban brands such as pub operator O’Neill’s, who said that it was the best thing that had ever happened to the centre.
He then had to decide at which market he would pitch the revamped scheme: the Cheshire set or the young urbanites. Chown conducted research into the two sectors and after analysing the results they came down on the side of the younger, casual leisurewear market and began to gear the scheme towards what they refer to as the “urban achiever”.
After working out the target customer and their needs, the next stage was to address the physical nature of the building. “It was an old civic building that was overpowered by the traditional architecture,” explains Mark Morgan. “It fails to say that it’s a shopping centre and the entrance is too small and hidden. We wanted to totally change it and bring the inside outside so that you knew what was going on. To do this we needed a large spectacular entrance into the scheme.”
The intention was also to create a better link to Victoria station through the rear of the scheme and also to find more retail space. An architecture competition involving three practices produced Benoy as the eventual winner.
Making an entrance
Benoy’s vision is to create a new entrance next to the existing one which will be converted into shops. The entrance will be ramped and lit from underneath, and a wall of video screens on one side is also being considered. A ramp will also be added at the rear entrance.
To create more space, balconies will be reconfigured and stalls installed with the intention of slowing people down and giving it more of a department store feel. Morgan estimates the modifications will add an extra 2,000 sq ft (186 sq m).
The centrepiece of the new scheme is a free-standing-sky bar that will fill the atrium. “It will be as if something has landed inside and exploded out through the entrance” explains Milligan.
The bar will be glazed and wrapped in a steel mesh with lighting both from above and from the inside. He is seeking a local operator for the bar rather than a national chain and it will link in with a new piece of public art that has been commissioned and will stand in the centre of Exchange Square.
Jones Lang LaSalle is the agent on the scheme and associate director, Dan Davies, says he has already had strong interest in the sky bar: “We want a good local entrepreneur who understands the Manchester market, has a proven track record and a vision of what to do with it. Because of the nature of the building it is not a mall caf It’s going to be something spectacular that will be synonymous with the Triangle, so we are going to have to work hard to make sure that we get the right type of operator.”
As for retail tenants, Mel Taylor says Retail Resorts International has explored the plans for the revamped scheme with several potential new occupiers, all of whom are in favour. She explains that the lower level will be pitched at the ‘urban outfitter’ market and Taylor will be working alongside JLL to putt in new occupiers.
Milligan says that around 60% of the existing occupiers will stay in the revamped Triangle. He estimates that internal works will be completed this year and the new entrance will be built by early next ear. He adds that Manchester City Council’s chief executive Sire Howard Bernstein has supported the plans throughout the design process. Along with his planners Bernstein responded favourably to the vision for the scheme and the creation of pedestrian walkways through Exchange Square itself.
The council has also backed plans for a giant television screen on the face of the building for the BBC that will broadcast 24 hours a day, seven days a week. The BBC Is piloting the concept in Manchester following the success of screens erected in the square to show the 2002 World Cup which attracted thousands of viewers.
Milligan feels this was a coup for the scheme and that further screenings of big sporting events in the square, the opening of Harvey Nichols and the Arndale extension will reinforce the Triangle’s position once its makeover is complete.
“We are working to make Exchange Square the heart of Manchester,” he adds. ‘Our hard objective is to double the footfall because the big problem is that it is not fulfilling its potential. This is achievable within the next three years when it will reach a plateau from which it will continue to grow by the time the Arndale is open in 2006.