MIOC on market for £16m

Till AM is looking to part ways with the nearly 100,000 sq ft office block in South Manchester, setting a guide price £2.5m north of what it paid for the property in 2011.

Manchester International Office Centre is located on 6.6 acres off Styal Road in Wythenshawe, just a few minutes drive from Manchester International Airport. The airconditioned building was constructed in 1954 and designed by Cruickshank & Seward. It has undergone a series of refurbishments since its inception.

Coming in at 90,200 sq ft across three storeys, MIOC is 95% let and generates an annual office rent of £1.8m a year. The rent rate average is £23/sq ft for the building. Current tenants include SEKO Logistics, World Cargo Logistics, and TGE Gas Engineering.

Approximately 5,500 sq ft of the property is empty, totalling seven smaller suites. A brochure from agent Carrick Real Estate stated that there is an opportunity to increase the average rent rate – noting that the prime rent for offices in South Manchester is £27/sq ft.

Since acquiring the leasehold of the property in March 2011 for £13.5m from fund manager Highcross, Till AM has remodelled the building’s entrance and reception. Till AM committed to a further £1m revamp earlier this year, focussed on refurbishing eight office suites and improving communal areas.

The on-site amenities include an on-site café, conference and meeting rooms, a gym with showers, and cycle lockers.

MIOC also has 534 parking spaces, which bring in £75,650 in rent a year.

Adding to MIOC’s interest is the presence of a one-acre development site on its grounds. This would be suitable for a hotel or another office, Carrick Real Estate stated. The parcel of land has already received planning permission for a drive-thru coffee shop.

The current guide price of £16m represents a net initial yield of 11.1% and a capital value of £177/sq ft. If sold at that price, it will be for roughly the same amount that the building went for in 2008 – when Highcross acquired it from the BAE Pension Fund.

The freehold for MIOC is owned by Manchester City Council. The leasehold is for 169 years from 1982, meaning there are approximately 126 years remaining. The lease is subject to a peppercorn rent from the city council.