Cordea Savills, investment manager, has bought 1 Portland Street, a 59,000 sq ft office block in central Manchester, from Bruntwood for £16.6m, at a yield of 7.00%, on behalf of Bishopsgate Long Term Property Unit Trust.
The property is covers 59,314 sq ft, of which 85% is office space and the remainder is three ground floor retail units. Tenants include Tesco, Costa, the Ministry of Foreign Affairs of the Portuguese Republic, the British Transport Police, Hiscox Insurance, Towergate and G4S.
Chris Oglesby, chief executive of Bruntwood, said: "Bruntwood has grown through buying unloved buildings in need of development and turning them into high quality investments. We are currently experiencing a market where the difference in pricing between prime investments such as No.1 Portland Street and unloved buildings has never been wider. In order to take advantage of these opportunities, the sale of No. 1 Portland Street will help assist our plans for growth and expansion. It will also help rebalance our portfolio of investment and development stock as we look to identify more buildings across the cities in which we operate that will benefit from the Bruntwood model of future-thinking building development and first-class customer service."
Steve Carrick, partner at Knight Frank, advised the fund manager. He said: "Cordea Savills identified Manchester city centre as a key target. We focused on a target list of assets on which to make unsolicited approaches. We are pleased to have been successful in purchasing 1 Portland Street. The balance of high quality offices coupled with retail income, fits well within our client's portfolio."
Patrick Lowther, portfolio manager, Cordea Savills, commented: "We are pleased to have acquired a high quality building in a very prominent location, which should be well placed to benefit as the Manchester market moves back towards growth. The acquisition complements the fund's recent office investments in Leeds and Cardiff, where similarly well located and refurbished buildings have been acquired off comparatively low rental profiles.
Cordea Savills were represented by Knight Frank. Bruntwood was unrepresented.