The German fund manager has added to its Manchester book with the acquisition of 85,000 sq ft Linley House from United Utilities Property Services for £12m at a net initial yield of 7%.
The deal is the second by Patrizia in Manchester, following the purchase of 20 acres of development land at First Street from Ask Real Estate.
Situated on Dickinson Street in the centre of Manchester, nine-storey Linley House is just under 95% let and provides refurbished office space to occupiers such as Electricity North West, property conveyance business My Home Move, and London School of Business & Finance, producing a combined passing rent of £890,000 a year and with an average unexpired lease of three years, offering the chance of rental growth in the mid-term.
Rob Brook, head of portfolio at Patrizia UK, said: “Manchester continues to generate excitement in the office market. Patrizia UK has always been interested in assets that offer the opportunity for driving rental growth and place making through active asset management, and on the verge of prime Linley House marks the ideal next step into the Manchester office market.”
James Porteous, capital markets director at JLL, advised Patrizia UK. He said: “We have seen a range of institutional investment into refurbished accommodation and there continues to be a strong occupational demand which will undoubtedly generate significant rental growth for high quality assets across the city.
“The building is occupied by a strong mix of tenants and has genuine reversionary lease potential. In addition the Oxford Corridor improvements and extension of the prime office core at St Peters Square will also add to Linley House’s existing prospects as a city centre asset.”
Colliers International is the letting agent.