Forma clinches £21m for 5 St Paul’s Square

The European fund manager secured the loan from the UK subsidiary of Israel’s Bank Leumi to finance its acquisition of the Liverpool office block.

Forma Real Estate Fund agreed a deal in June to purchase the 136,000 sq ft 5 St Paul’s Square for around £35m from fund manager Abrdn.

The nine-storey property is in Liverpool’s central business district and current tenants include law firm DWF, which occupies 42,000 sq ft across three floors, Hays Recruitment and shipping specialist Denholm Logistics.

The building is fully let but 28,000 sq ft is due to be vacated by Trinity Mirror North West – the parent company of the Liverpool Echo – and Lloyds Bank in the coming months.

Other occupiers at the St Paul’s Square development include Hill Dickinson, Sony, Keoghs and BT. 5 St Paul’s Square completed in 2008 and features 16,000 sq ft of ground floor retail space and generates an annual rental income of £2.4m, according to Forma.

The acquisition was subject to funding being arranged. Now, Leumi UK has agreed to lend Forma £21.4m.

Chris Stallard, relationship director at Leumi UK, said: “We’ve seen a marked increase in demand for premium office space over the past year with 91% of year-to-date take-up being of Grade A quality.

“Liverpool is a vibrant metropolis that contains a young and highly skilled workforce from its four universities. Therefore, it is paramount that the city can meet the needs of its professional workforce with high-quality office space that achieves long-term sustainability goals.”

Chris Taylor, UK chief executive of Forma, said that Leumi’s “specialist knowledge of the office sector was instrumental in agreeing the funding for our ambitious plans”.

Forma, he added “continues to progress its strategy of investing in high-quality offices in regional central business districts where active asset management strategies and inward investment into the physical real estate can drive out-performance.

“Liverpool is a promising city for repositioning existing assets to deliver best in class office space. With the development pipeline constrained by high build costs, we are delighted to acquire 5 St Pauls where we can align our ESG investment plans with increasing tenant demand for best-in-class grade A stock in Liverpool’s city centre.”

Leumi UK’s property finance manager Guy Brocklehurst told Place North West’s Subplot last year that the lender was “very open to financing high-quality opportunities within the North West”.

Forma was advised by ACRE on the acquisition of 5 St Paul’s Square and CBRE advised Abrdn.

Worthington Owen is the building’s retained letting agent.