Manchester City Council is to buy the 12,700 sq ft The Courtyard in Ancoats, part of Royal Mills, from Cert Property in a deal worth around £1.85m.
The development at Redhill Street is fully let to 10 different tenants, producing a gross income of £144,283 per year, with an average rent of £13/sq ft. There are also five suites totalling 3,500 sq ft which have been sold on a long-leasehold basis at a peppercorn rent.
The move, which is set to be agreed by the council next week, will cost around £1.85m which will be paid for out of its existing Eastern Gateway budget.
Officers said the purchase of The Courtyard would “provide the council with significant control over the commercial spaces at Royal Mills and enable it to maximise opportunities to support the existing portfolio, both within Royal Mills and across the Ancoats estate”.
“Given its other interests in the area, the business units would strengthen the council’s position in being able to curate the economic regeneration of the area”, added the council.
Under the deal, the council is acquiring the 150 year lease from Cert Investments. part of Cert Property. The 125 year lease is sub-leased in part to Cert Properties which the council may either acquire or might be surrendered back to Cert Investments in advance of the acquisition. The freehold is already owned by the council.
Tenants in The Courtyard include Elevate Architects, Street League, Urbane Forms, and Strazala Architects.
Three suites ranging between 1,400 sq ft and 746 sq ft, are owned a long leasehold basis by Team Netsol, City Trustees, and M4nchester Holdings, the latter of which counts former Manchester City FC captain Vincent Kompany as a director.
Renaker delivered an overhaul of Royal Mills after buying the site from ING Real Estate Development in 2013, including the delivery of 146 apartments. LSH’s capital markets team advised on the transaction.