Hermes Real Estate is teaming up with The Co-operative Group on the UK’s biggest regional redevelopment project, the mixed-use NOMA scheme in Manchester.

The Co-Op and Hermes, the asset manager wholly owned by the BT Pension Scheme, will be equal partners in the £800m (€967m) joint venture.

An initial agreement is expected next month.

The 10-year project will see 20 acres of land developed in the centre of the city.

Hermes’s development arm, Argent, however, will not be involved in the project.

The developer, which Hermes bought in 1997, is currently working on the mixed-use King’s Cross development.

Chris Taylor, chief executive at Hermes Real Estate Investment Management, compared NOMA’s attributes with the King’s Cross scheme and Birmingham’s Paradise Circus.

He said: “This is consistent with our UK strategy of investing in commanding sites within major urban areas.”

The joint venture is the latest evidence of growing interest from institutional investors in regional UK property markets.

Taylor said Hermes was attracted to areas benefiting from “improved infrastructure, regeneration, enhanced public realm and proximity to major retail and leisure facilities”.

Late last year, Hermes sold a 50% stake in a £270m Milton Keynes shopping centre on behalf of the BT Pension Scheme, which had owned the 1.3m sq ft asset for nearly 40 years.

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