Abu Dhabi's £1bn Manchester Deal Delivered Only a Third of Its Homes

By Olivia Hart

Manchester sold a prime slice of city centre land to Abu Dhabi for £5m — and fifteen years later, UAE government and Emirati developer holdings in the city stretch across an area the size of 260 football pitches. That is the peak figure reached in 2023, according to a Guardian analysis of land and property records spanning more than a decade.

The story begins far from Manchester. When Egypt's Hosni Mubarak fell in the 2011 Arab Spring protests, his Muslim Brotherhood successor Mohamed Morsi alarmed UAE rulers. The UAE, a key western ally, warned David Cameron's government it could pull billion-pound arms deals if Britain did not act against the Brotherhood. A secret Whitehall unit was established to keep the emirates on side, and lucrative investment deals were offered in private meetings later revealed by the Guardian.

How did a football club become a property empire?

Sheikh Mansour bin Zayed al-Nahyan, Manchester City's owner, has built a portfolio well beyond the club. It includes the UK's biggest indoor arena, an "upper-upscale hotel" that opened last month, a suite of apartment blocks, and university research investment run through a firm led by City chief executive Khaldoon al-Mubarak.

The pivotal deal came in summer 2013, when Cameron's government asked Manchester city council to draw up three investment proposals for the UAE. The result was the £1bn Manchester Life scheme: the council sold land to Abu Dhabi for £5m to build 6,000 homes, with a right of first refusal on other projects.

Richard Leese, then council leader, told the Guardian: "That was a UK government-brokered deal and we were obviously seeking a very significant investment for what would in total have been a £1bn scheme." He said no other developers were willing or able to build in Ancoats at the time.

The delivery record is thinner than the promise. Manchester Life has built 2,039 homes — a third of the total — with other developers adding 2,839, for a combined 4,878, nearly 20% short of the 6,000 envisaged. Only 8% of those properties qualify as social or affordable housing, against the council's stated policy of at least 20%, and Manchester Life itself provided none.

What does deprivation look like next door?

Within half a mile of the Etihad Stadium, four charity food banks operate. Mark Blake, chief executive of Manchester Central Foodbank, said of the new luxury flats: "It's bound to cause resentment." He warned that "when it's in your face and is during a cost of living crisis it potentially could lead to some unrest."

Lib Dem councillor Alan Good said residents "look at the shiny new towers and there's a resentment — a feeling that they're not benefiting from what Manchester is benefiting from." He described a property crisis compounding conditions for 20,000 people on the city's social housing register. Dr Matthew Stallard of University College London noted that "in Ancoats, it's a very clear line where the money is and where the money's not."

What are the questions for Andy Burnham?

In 2016, Burnham told the Salford Star that the Greater Manchester combined authority's loan fund had been "too focused on city centre and luxury schemes." A year later, he signed off a £55m loan to Jersey-registered property firms owned by Sheikh Mansour, whose family fortune is reported at about £300bn. GMCA says the loans were repaid in full; councillors on its scrutiny committee are now investigating. Weeks before approval, Burnham received hospitality from City's owners at a meeting that surfaced only last week. Five further meetings with the club's bosses have emerged after he initially cited one. Burnham said he had asked GMCA for a "manual trawl of everything, as I want everything possible to be out there," adding: "There's no question about that — full transparency."

Transparency has limits. A December 2015 ten-year "collaboration agreement" gave Abu Dhabi first refusal on land near the city centre and, in effect, gagged elected politicians from announcing the deal without written approval from Sheikh Mansour's firm. A council spokesperson called it "a standard agreement between two parties." The property, now worth an estimated £350m, is ultimately owned by Sheikh Mansour via Jersey-domiciled subsidiaries; the council has received nearly £3m under an undisclosed profit-sharing agreement plus £17.6m in council tax. The precise taxpayer return remains unknown.

What happened inside the council?

In 2017 the council paid £42m for a hollowed-out retail park — at least six times higher per acre than the adjacent land sold to Sheikh Mansour. Senior officer Dominic Hayes resigned in March 2018 over concerns about the Mansour deals. A colleague's contemporaneous notes record senior figure Eddie Smith saying: "You don't criticise the council's relationship with the football club in this organisation and hope to survive." Smith denies making the comment. An internal investigation found a second senior employee believed the council had "overpaid" and that the Abu Dhabi-led project was "driving the master planning for a site they didn't own."

Council leader Bev Craig, who ordered a review on taking office in December 2021, said it confirmed the deal was "all legal, all above board." But a review published in July found "weaknesses in documentation, monitoring and assurance," particularly around profit-sharing. University of Sheffield's Prof Jonathan Silver raised "urgent questions" about what happens to the homes if Mansour sells Manchester City amid the cheating scandal — and, notably, plans to house Burnham's "No 10 North" on the Abu Dhabi-linked site were quietly shelved in October as scrutiny grew. Leese's verdict stands unshaken: "It is a phenomenally good deal for Manchester." Whether the councils' own reviews fully support that confidence is another matter.