Bruntwood’s City Tower sold to Schroders
Asset manager Schroders has paid £132m, reflecting a net initial yield of 7%, for the 615,000 sq ft office tower in Piccadilly, Manchester.
Bruntwood instructed CBRE in March to market the 30-storey tower with an estimated price tag of £125m, after it attracted interest from international investors.
The tower, which is fully let, is the third tallest building in Manchester at 107 metres and totals 615,429 sq ft of office, retail, leisure and hotel space.
The sale is the biggest office transaction in the region since the Co-op Group's new headquarters building, One Angel Square, was sold for £142m last year.
Schroders said it had acquired the building through the Schroder Real Estate Investment Trust, which will hold 25%, and two of its managed funds, Schroder UK Property Fund and Immobilien Europa Direkt.
Bruntwood bought the tower in 2004 as part of a £65m purchase of the run-down Piccadilly Plaza site. In 2008 it invested £38m in refurbishment.
Tenants include Indian outsourcing firm Aegis, recruitment specialist Hays, and Bruntwood also has its headquarters there.
Duncan Owen, head of property at Schroder Property Investment Management, said: "The vendor has already made significant improvements via an extensive refurbishment programme and we believe there is further opportunity to deliver rental growth for this element of the asset in the future, underpinned by improving occupational demand. There is also the potential to generate value from asset management of the property."
Chris Oglesby, chief executive of Bruntwood, said: "At 615,000 sq ft on a three-acre site, the building attracted a great deal of interest from parties from across the globe. We are very pleased to have been able to identify a purchaser that paid a good price and could acquire this complex asset in a reasonably tight timescale. As important, however, was to find an organisation that will be a responsible owner of this important asset for Manchester and be a great addition to the investor base of the city."
Bruntwood will continue to property manage the building.
Michael Hawkins of Colliers advised Schroders while CBRE advised Bruntwood.