Property: Manhattan's latest transfer: Our industrial past is being transformed into the lofty height of urban living, New York style, says Anne Spackman

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If you walk into an estate agent's looking for warehouse-style city living, don't be surprised if they point you in the direction of Manchester. Last week the Manhattan Loft Corporation won planning permission to turn a monument of the city's 19th-century industrial past into a monument of confidence in its future.

The elegant building at 42-44 Sackville Street, overlooking the public gardens and the Rochdale canal, is to be stripped to its structure, fitted with modern services and party walls and sold like a honeycomb of spaces for buyers to finish off. It will be the third venture of the company that has most successfully exported the spirit of Manhattan loft-living to England.

What the Manhattan Loft Corporation does is essentially to sell serviced space. You buy a few hundred or thousand square feet in a particular location and divide it up however you like. Though they draw up suggested floor plans, these are purely to guide buyers as to what will fit into their area.

The Manhattan Loft Corporation always chooses to work in city-centre buildings with an industrial past, offering high ceilings, large windows and solid architectural detail. The Sackville Street building will retain its interior columns and its fine stone carvings on the outside walls.

This was how we all imagined London's Docklands would be. Instead, it has turned into a jumble of housing estates and traditional flats, with only the odd development, such as New Crane Wharf in Wapping, sticking to the authentic warehouse brief.

Docklands lost its nerve. The Manhattan Loft Corporation's owners have kept theirs.

They bought their first building, an old mill in Summers Street, Clerkenwell, on the northern fringes of the City, two weeks before the 1992 general election and launched the project the day after Black Wednesday in the autumn. At what is widely accepted as the lowest point in the housing recession, they sold all 23 apartments easily.

Their second project is taking shape in Soho. On the site of the old Marquee club in Wardour Street, where the Stones et al strutted their stuff, the company is creating a block of 33 apartments and four penthouses. For Soho habitues of the Sixties, such as David Bailey, who has reserved one of the flats, it will simply be a case of moving upstairs.

Soho Lofts is still a year away from completion, but 17 of the apartments are already reserved (the four penthouses will come later). They have sold as a result of one sign incorporating the company logo and a telephone number on the front of the site in Wardour street. And, of course, by word of mouth.

Soho is enjoying a renaissance. Where once it was renowned for sex and sleaze, now it is sexy in the modern sense of the word: it is the place to be.

Its small grid of streets is lined with bars and restaurants, whose fashionable customers spill out on to the pavements. Where Covent Garden has become a safe stamping ground for visitors and wide- eyed tourists, Soho has kept its sense of daring.

The Soho Lofts building used to be a tin factory in the 19th century. Its brick walls are being sand-blasted inside and out and an extra five storeys are being built on to the four-storey structure.

Behind its uniform facade the building is shaped like two quadrangles joined by a central lift shaft. In the middle of each quad is a deep lightwell, lined with the same broad, arched windows which define the building's style.

With two tiny exceptions, the apartments range from about pounds 120,000 and 500 sq ft up to pounds 310,000 and 1,200 sq ft. Two sets of buyers have already reserved adjoining flats to create huge one-storey and two-storey flats.

The penthouses will be vast duplexes with curved ceilings 25ft high on the top floor and terraces the size of other people's apartments. They are expected to sell for somewhere around pounds 1m.

Down on the ground and lower ground floors Sir Terence Conran is taking over the site of the Marquee for another vast restaurant, twice the size of Quaglino's, his high-profile place in St James's. 'It will be the largest restaurant in Europe,' said Harry Handelsman, one of the two men behind the Manhattan Loft Corporation. 'It hasn't got an official name yet, but we call it Megalino's'

When the current builders move out next spring, the buyers' own builders will move in, laying floors, erecting internal walls and fitting bathrooms and kitchens. It can cost as much or as little as you like. One film director spent just pounds 16,000 kitting out his 1,400 sq ft flat in Summers Street, doing some of the work himself.

In Summers Street every apartment has turned out differently, much to Harry Handelsman's delight. 'I am incredibly impressed with what people did with their spaces,' he said. 'I hope we get a similar variety here.'

That inaugural project attracted a mix of established and new professionals - barristers and accountants alongside photographers and media people. Soho is likely to be more uniformly glamorous.

In Manchester no one knows who will buy the Sackville Street apartments. The idea of smart urban living is only just starting to gain hold, with encouragement from the city's bold development corporation.

If it is successfu1, it will be the first of many schemes. The company has already earmarked a second building and two more are under consideration. Moss Side could find itself twinned with Greenwich Village, rather than the Bronx.

(Photograph omitted)