Manchester United FC Sale: It's All About Real Estate

An unprecedented 7-0 defeat by Liverpool FC earlier this month probably hasn’t devalued Manchester United in the eyes of its fans and potential buyers, whatever it says about current management and players.

The football giant, based at the famous Old Trafford stadium on the edge of Manchester city centre, could soon have a new owner — and real estate is a key part of the deal.

Qatari Sheikh Jassim bin Hamad al-Thani is the latest to be associated with a bid to buy Manchester United FC.

The global football brand is expected to be the subject of a bid by Nine Two Foundation, a special purpose vehicle associated with the Sheikh, the Financial Times reported.

The Glazer family, the club's U.S. owners since 2005, revealed their intention to sell in November 2022.

The family are thought to be looking for £5B, with a bid deadline of June set after a first round of talks with potential buyers earlier this month. Other bidders include Sir Jim Ratcliffe and his INEOS group.

Whoever buys — or retains control — Manchester United will be a real estate proposition as well as a sporting bet.

Manchester United's real estate has long played a role in the club's on field success. The club, then known as Newton Heath, almost went bankrupt in the early 20th century before being rescued in 1902 by wealthy local brewery owner John Henry Davies, who moved the club to a new 80,000-seater ground in the Old Trafford area on the edge of the city centre.

The large new stadium, regarded as one of the best in England, generated significant revenue for the club, albeit Liverpool beat United 4-3 in the inaugural game at Old Trafford in 1909. 

That location on the outskirts of the city centre was subsequently to serve United well. Unlike other large rivals like Liverpool, Everton or Arsenal, the ground was not hemmed in by rows of terraced houses with multiple occupants and owners. Rather the ground was bordered by a railway line on one side, and was otherwise surrounded by brownfield and industrial land, with a limited number of owners with whom deals could be done to buy land around the ground.

That meant, when the club wanted to expand in the 1990s to capitalise on dominance on the pitch, it was able to do so with relative ease. Expansions between 1995 and 2006 took the capacity of the stadium from 44,000 to its current level of 74,000, with on-field success being matched by expansion, which created revenue which bolstered on-field success, in a virtuous circle. 

And that strategy has continued in one way — Manchester United has been acquiring land around its Old Trafford base for several decades, including more recent deals.

Since 2005, when the Glazer family bought the club, there has been a diligent and determined effort to grow local landownership. The family saw stadiums as potential focus for money-spinning development in a way familiar in the U.S. but which was generally not so prominent — or so successful — in the UK until Tottenham Hotspur spent £1B on a new stadium in 2019, which has driven revenue increases by hosting concerts and NFL matches. 

In 2011 United acquired a 1-acre plot immediately opposite the stadium, an office block, a 177K SF warehouse and seven industrial units for just £8.2M in a deal with Segro. Industrial land values and rents have skyrocketed since then, as have residential values, which have more than doubled in the past decade, according to estate agent JP & Brimelow.

Land around the stadium has become more sought-after since 2005 as Manchester’s build-to-rent and for-sale apartment boom has expanded from the city centre to well-connected districts like Old Trafford. The area, with its own tram stops and impressive infrastructure, is just a few minutes from the city centre and slated to see 50 acres of brownfield development including another 4,000 new apartments and 500K SF of office floorspace, as per a masterplan created by the local authority.

But while the Glazer family and Manchester United have been buying land and building a portfolio around the stadium, plans for a redevelopment are yet to materialise. In spring 2022, architect Populous was appointed to draw up a masterplan for the redevelopment of Old Trafford, but those plans are on hold while the sales process is ongoing. 

And there has been criticism that the Old Trafford stadium itself, described by one journalist on opening in 1909 as "the most handsomest, the most spacious and the most remarkable arena I have ever seen", and dubbed by legendary player Bobby Charlton as "the Theatre of Dreams" has fallen into disrepair. 

Former player Gary Neville, who has his own property business, has called out the quality of the stadium and infrastructure, and said that the Glazers need to bring new capital into the club in order to improve the ground and create the kind of commercial development that can support the club. And the physical infrastructure of some parts of the ground is old and in need of modernisation.

As well as the Tottenham example, Spanish giants Real Madrid are expanding the capacity of the Santiago Bernabéu stadium and adding new hotels, museums and offices. 

While Madrid's ground is in the city's commercial centre, Old Trafford is seen as an area ripe for rented and for-sale residential development and further commercial development, as evidenced by the local authority masterplan. United's holdings could be at the centre of such a plan.

The Glazer family is reported to have been mulling plans for a £1B refurbishment or £2B rebuild since last year. And potential bidders clearly see value in United's real estate. One party that has said it is interested in funding the acquisition of United, hedge fund Elliot Management, is reported to be looking at providing debt specifically to fund the redevelopment of Old Trafford.

The new owners, confronted with the need to boost earnings and to satisfy fan aspirations, are likely to face pressure to take an early decision.