Manchester City Council has received just under £3 million from a profit-sharing arrangement with Manchester City's owners, Abu Dhabi United Group (ADUG), tied to property developments in the Ancoats and New Islington areas of the city, it has emerged.
The agreement, struck in 2014, allowed the council to claim a share of so-called "super-profits" generated by ADUG-backed schemes once returns exceeded an agreed threshold. The council and ADUG became partners through a joint venture known as Manchester Life, which was originally envisioned to deliver more than 6,000 homes with up to £1 billion in investment over ten years.
To date, roughly 1,500 homes have been built across nine sites as part of what the council describes as a £1.25 billion regeneration programme. A council spokesperson said the payments received so far equate to approximately £26,000 per home, which it characterised as "an above-market return for land that had failed to attract market interest since the 2008 financial crisis." The council also noted the project has preserved two historic mills, created 30,000 square feet of commercial space, and attracted a wave of independent businesses and new residents to the area, calling it "an internationally recognised success story."
However, questions have been raised about whether the council secured the best possible terms. Professor Adam Leaver of the University of Sheffield, co-author of a 2022 study examining the council's relationship with ADUG, said commercial secrecy surrounding the deal makes it difficult to assess its fairness. He pointed out that profits funnelled to ADUG through Jersey-registered companies are not publicly disclosed, meaning there is no way to compare what the council received against what its partner retained. The confidentiality also obscures the profit threshold ADUG needed to cross before owing the council a share.
Leaver further challenged the council's narrative that the area held little commercial appeal before the Manchester Life partnership began. He noted that property development activity in Manchester, while subdued after the financial crisis, had already started recovering by 2013 — just before the deal was finalised — citing early investment, a growing population in Ancoats, and projects such as Royal Mills, the Ice Plant development and the renewal of Cutting Room Square. He suggested the area was already undergoing gentrification as a natural extension of the Northern Quarter's revival, with land values climbing as developers grew more willing to take on risk.
Sir Richard Leese, council leader at the time the deal was signed and now honorary president of Manchester City, has maintained that Abu Dhabi's investment was the driving force behind the area's rising value. Leaver disputed this, saying his own research suggests there was already meaningful developer interest in the land before ADUG's involvement.
Scrutiny of the council's dealings with ADUG has intensified following the Premier League's recent ruling that Manchester City committed 115 rule breaches, including allegations of disguised funding in which the club's ownership is said to have covertly supplemented sponsorship deals with more than £800 million of personal funds. The club denies any wrongdoing and is appealing the decision.
The fallout has stirred concern that broader UAE investment in Britain could be affected, with reports suggesting Emirati officials warned the dispute might strain diplomatic ties between the two nations. Prime Minister Andy Burnham, who served as Greater Manchester's mayor until earlier this year, said he would be troubled if ADUG withdrew its backing from the city over the Premier League case — a comment that drew criticism from political rivals, including accusations that he was defending the club's ownership. Burnham has since pledged to publish records of all his interactions with Manchester City and ADUG during his tenure as mayor.
The council maintains it expects to receive a further payment from the overage agreement in the near future.
Based on reporting from BBC Sport Football.