Elisabeth House, one of the few remaining large development opportunities in Manchester city centre, is not for sale and will be developed by owner Greater Manchester Property Venture Fund, according to the fund's advisor.
Nick Whipp, development partner at GVA Grimley in Manchester, advisor to GMPVF, said reports the site was on the market were wrong. He said: "We are not selling Elisabeth House, we are developing it out."
However, he added: "There might be a need to bring in a development partner at some stage but essentially the fund is doing it themselves.
"GMPVF has £10bn of assets and is in the business of developing property to create investments. Elisabeth House could have an end value of £200m and is not something the fund would want to lose out on."
Argent, an established Manchester office developer, is many people's clear favourite to win the race to become development partner. David Partridge, joint chief executive of Argent, confirmed he would be keen to take a role in the site. He said: "We are interested and we are waiting to hear if we make the shortlist."
GVA has strong development links with Argent, having previously managed the sale of the Piccadilly Gardens and Piccadilly Place sites to the developer.
Partridge is keen to line up his next office development to begin when the 675,000 sq ft Piccadilly Place completes in two years' time.
Whipp denied that a shortlist was being drawn up and refused to discuss speculation that Maple Grove, not normally a speculative office developer, had also been approached over Elisabeth House. Standard Life has also been linked with the possibility of a joint venture but Whipp declined to comment on the rumour.
The 100,000 sq ft building is largely vacant and has the potential for a new block or tower of more than 200,000 sq ft as a key gateway into the city on St Peter's Square.
GMPVF is part of the Greater Manchester local authority pension fund. It acquired Elisabeth House for £15m in 2003.
The fund has previously delivered offices at Peter Street, Quay Street, and Manchester Science Park. Its 83,500 sq ft Deva Centre, off Trinity Way in Salford, is currently for sale for £13.25m, reflecting a 6.4% yield.