Exchange Flags Feb 2019

Exchange Flags sells for £68m

Charlie Schouten

In one of the largest transactions in Liverpool in recent years, the 360,000 sq ft grade two-listed building has been sold by Shelborn Asset Management to Ashtrom Properties for £68m.

The building has been sold two years after it was purchased by Shelborn for £42m from Hudson. It was previously under offer by a Hong Kong investor earlier this year at a guide price of £70m, but Ashtrom has now snapped up the building for £68m reflecting a net initial yield of 7.67%.

Comprising Horton House and Walker House and positioned directly behind the town hall, Exchange Flags includes 313,000 sq ft of offices over 10 floors, along with 28,000 sq ft of retail, along with an 18,000 sq ft museum.

Office tenants include law firms Brabners and DLA Piper; Regus; the Secretary of State for Defence; Jackson Carter; Brookes Bell; Colliers International; and Deloitte. Colliers signed up for 1,260 sq ft in 2017 but is rent-free until September this year.

The Secretary of State for Defence is the largest tenant with 68,000 sq ft over three floors at a rent of around £16/sq ft. Its lease is due to expire in November 2023. Brabners is the largest occupier in Horton House with 44,000 sq ft over the second, third, and fourth floors, again at a rent of around £16/sq ft, and with a lease expiry in 2023.

Regus is also based in Horton House in 23,500 sq ft; the serviced office firm signed up for the space in January 2018 with two years rent-free.

At the ground floor, the retail occupiers are tapas bar El Gato Negro, Equire Coffee; Philpotts; and Fazenda.

The building generates a passing rent of around £5.6m a year, equating to a rent of around £15.50/sq ft on average. Headline rents at Exchange Flags now stand at £17/sq ft, driven by a shortage of available office space in the area.

Knight Frank represented Shelborn Asset Management on the sale while Parkdales and Mason Owen represented Ashtrom. Worthington Owen is the letting agent.

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A nice tidy profit of £26m. What a bargain.

By Bobby Dazzler

Would look great as a hotel or student digs…

By Jamie

Fair play to Shelborn – Around £40m profit shifting two assets. Bought v well.

By Anon

That’s Liverpool’s office investment double Manchester’s in 2019. Leading the way this year. Manchester overpriced? Catch up..

By Liverlad

@Liverlad haha yeah right! More than 1.4m sqft of new office space as announced in Manchester across a series of schemes – which included one for 395,000sqft and another for 350,000sqft. No problems here bud!

By Robert

This square could be so much better utilised.

By L19

Actually Vincent cafe has closed down, and El Gato Negro opens tomorrow, in its place.

By Anonymous

Exchange Flags is doing fine. The article doesn’t mention the World War II museum in the basement know as Western Approaches. This was the headquarters for the Battle of the Atlantic, and the reinforced control room, deep below, is still intact complete with wall charts and equipment just as it was left in 1945.
Exchange Flags will be further enhanced when Rowse’s Martins Bank reopens as a Hayley Principle Hotel. This magnificent 1930s edifice deserves to be appreciated, and the hotel is a great way of opening it up. It’s Grade II* interior is amazing. Exchange Buildings work just fine as offices!

By Roscoe

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