German fund close to £50m Mann Island office deal

Neptune Developments is close to agreeing a deal with a German pension fund to sell the 100,000 sq ft office building at Mann Island for close to the asking price of £53m.

Six out of ten bidders for the waterfront asset were German pension funds, sparking excitement amongst agents that the UK regions, including previously marginalised Liverpool, are back in play with institutions.

Neptune is currently in legal negotiations over a pre-let for the entire office for 30 years to Merseytravel.

Investment agents say the sale would represent a net initial yield of 6.25%, equivalent to 2005 levels. However, Neptune's Steve Parry, speaking at the Liverpool & Manchester Property Forum conference this week, said the yield would be better than that rumoured.

Liverpool's prime office yields peaked in January 2007 with the sale of City Square at 4.6%, for £49m, to London Capital.

Earlier this year the Bank of Scotland Corporate agreed a package to partially fund the first stage of the £128m Mann Island scheme, which comprises two residential buildings of 376 flats, pre-sold to investor/re-seller Dylan Harvey in January this year for £70m.

Mann Island is currently on site on the land once reserved for the aborted Fourth Grace. It will include 80,000 sq ft of shops and a 13,000 sq ft exhibition venue. The entire scheme is due for completion in 2010.

DTZ is advising Neptune/Countryside.