Catalyst Capital, the European real estate investment and asset management firm, has acquired the freehold of the landmark office building, Arkwright House, in Manchester for £11.05m from receivers.
Arkwright House is a grade 2-listed building in Parsonage Gardens behind Deansgate, designed in a neo-classical style by local architect, Harry Fairhurst, for the English Sewing Cotton Company and completed in 1937.
The building was owned by Manchester-based Wrather Group but it defaulted on a £19.5m loan against the property and one other, Dock Office in Salford, and the loan was called in by Lloyds. Both were acquired by US-based Kennedy Wilson in 2013 when it bought a portfolio of distressed debt from Lloyds, backed by Deutsche Bank. GVA in Manchester was appointed the Law of Property Act receiver over the buildings in April.
The building comprises ground and seven upper floors, totalling 86,970 sq ft, of which three quarters is vacant. There are three tenants, Crowe Clark Whitehill and Howgate, Sable & Partners in office space and a Revolution Bar on the ground floor.
Catalyst Capital is working up plans for a comprehensive refurbishment and extension of the building, which would increase its overall size to just less than 100,000 sq ft and provide individual floorplates of 15,000 sq ft.
Guy Wilson, a partner of Catalyst Capital, said: "Arkwright House allows us to continue our strategy of purchasing regional office properties with scope for asset enhancement in recovering markets.
"We will be undertaking a major repositioning of this property for completion in 2015. We are seeking to capitalise on the lack of future grade A office space in Manchester city centre.
"We continue to look for similar office investments throughout the UK."
Catalyst Capital was advised by CBRE and the vendors, LPA receiver for Wrather, were advised by GVA.