Martley picks up £40m Northern offices

Matalan’s Knowsley headquarters, Central Square South in Newcastle, and One City Place in Chester have joined the London-based investment advisor’s newly launched regional office fund.

The trio of properties represented a combined value of around £40m for the Martley Capital Regional Office fund and a blended initial yield of 13.4%, according to the company.

Matalan’s 114,800 sq ft headquarters at Knowsley Business Park is the largest of the three properties. Martley acquired the property from a vehicle owned by Matalan owners, the Hargreaves family. Designed by Fletcher-Rae, the BREEAM Very Good property includes 651 car parking spaces. JLL had been marketing the property with a £21m guide price.

Central Square South is the second largest of the trio, coming in at 85,000 sq ft. It was acquired for £12.1m from Aberdeen, with the deal representing a net initial yield of 13.5%. Current tenants for the Newcastle office include PWC, DWF Law, Towergate Insurance, and HSBC. Savills represented Aberdeen on the deal.

One City Place in Chester had been put on the market last summer for £13m by owner Federated Hermes. Shortly after, Federated Hermes merged its property fund with L&G’s.

One City Place is 69,300 sq ft and located off Queens Road. It brings in £1.3m annually in rent, with current tenants including Sykes Cottages, Black & Veatch, SL Investment Management, and RSM. If sold for the £13m guide price it was marketed for – that deal would have represented a net initial yield of 10%. Savills, once again, acted for the vendor.

NorthCap and King Street Real Estate represented Martley on the deals, with Birketts providing legal advice.

While they may be the first three properties for the MCRO Fund, they will not be the last. Martley has ambitions to invest a further £200m at least into the fund, according to Richard Croft, chief executive of Martley Capital.

Rory Finnan, managing director for Martley Capital, explained the group’s interest in regional offices.

“The acquisitions demonstrate Martley Capital’s strong belief in the resilience and recovery of the regional office market,” he said.

“The assets were acquired at attractive entry prices and provide us with an opportunity to deliver significant value through proactive asset management.”

Croft, added: “There are similarities to the industrial investment market in 2010, which is why the sector will be a primary focus for Martley over the next year.”

Martley Capital was founded in December 2023. It currently has around £1bn of assets under management.