Aviva Investors has agreed to forward fund the development of Two New Bailey Square, the 190,000 sq ft office in Salford for £113m.
The purchase was undertaken on behalf of the Lime Property Fund as part of its continued investment into high quality, long income real estate in the UK.
The development, which is expected to complete by the end of 2019, is being underwritten by Salford City Council who have taken a 25-year lease.
Two New Bailey Square is the second office being built within New Bailey, the mixed-use development delivered by English Cities Fund next to the River Irwell, just over the bridge from Spinningfields. Bowmer & Kirkland is the contractor.
A second multi-storey car park, pre-let by NCP, is currently under construction at New Bailey, as well as work on Riverside House, an 11,000 sq ft office directly opposite Two New Bailey Square.
At the end of last year, the Government Property Unit was rumoured to be close to taking a pre-let on the entirety of the building, as part of its consolidation programme.
A statement from Aviva said: “Aviva Investors has identified Greater Manchester as a region of major growth and it forms part of a targeted strategy to focus on fewer but stronger UK cluster locations. In particular, in an increasingly digital, interconnected world, with rising numbers of automated professional jobs, the sustainability of cities is a key driver of real estate investment decisions and Aviva Investors believes the Manchester office market looks better placed to prosper from the influence of the knowledge-based economy than most.”
Two New Bailey will be made up of open floor plates of up to 18,000 sq ft and private outdoor terraces across 10 floors. The scheme will also include a basement with 50 car parking spaces and street level cycle facilities with 102 bicycle spaces.
Lime Property Fund is a secure income long lease property fund managed by Aviva Investors with over £2bn of assets. The fund, launched in 2004, targets property investments let to strong tenants on leases with inflation-linked or fixed-rental uplifts and lease terms of 15 years plus.
English Cities Fund is a joint venture between Muse Developments, Homes England, and Legal & General. L&G has funded previous phases of New Bailey, including the PRS Slate Yard blocks currently on site.
Phil Mayall, development director at English Cities Fund, said: “Over recent months, development at New Bailey has gathered pace with new offices, residential apartments and a new car park all on site, helping to further establish the scheme as a focal point for business and leisure in the city.
“Now that the Ordsall Chord is in operation, we’re seeing significantly greater volumes of people in the area and with One New Bailey close to fully let and the scheme’s first BTR development, the Slate Yard, almost fully occupied, there’s a growing sense of community that will only continue to strengthen with the addition of Two New Bailey Square.”
Aviva Investors was advised by King Street Commercial.