Manchester City Council is in negotiations to buy Capital & Regional’s Great Northern Warehouse for around £75m.

The council is understood to be interested in buying the 10-acre development opportunity, currently a leisure facility, to provide extra conferencing facilities in Manchester city centre.

It is located between Deansgate and the Great Northern Square and the International Conference Centre. Tenants include Virgin Active, Virgin’s gym subsidiary, and an AMC 16-screen cinema.

Capital & Regional bought a 50% stake in the scheme in 2004 from AWG, which valued the development at £72.5m. In September 2005 it bought AWG out of the scheme.

In November last year Chester Properties walked away from a £90m purchase of the scheme because of difficulties in securing debt.

Sir Howard Bernstein, chief executive of Manchester City Council, said: ‘We can confirm we are in discussions with the owners of the Great Northern Warehouse with regard to a possible acquisition.

‘We recognise that this building is strategically important for Manchester. It could play a crucial part in our city centre regeneration plans which, through careful, considered and comprehensive planning, will ensure our priorities can be delivered over time.’

Franc Warwick is advising Capital & Regional.