Argent has sold its 80,000 sq ft office building The Hive in Lever Street in Manchester's digital start-up district for £17m to Kames Capital at a yield of around 6.75%.
The deal is the latest in a growing list of investment transactions in the Northern Quarter, between Piccadilly and Victoria stations. Earlier this month, Helical Bar paid £7.6m for the 42,000 sq ft Dale House. Last month, the government pledged £4m to a new start-up incubator at Federation House in NOMA, the nearby development by Hermes and the Co-operative Group. Kames bought the Smithfields Building in Tib Street last year.
David Partridge, managing partner of Argent, said: "The sale of The Hive to Kames Capital shows the strength and quality of the building we developed in partnership with Manchester City Council. There is a very exciting mix of tenants in the building, whose enthusiasm and commitment to the space has no doubt helped attract the buyers."
The Hive was developed in 2010 with an 18,000 sq ft pre-let to the Arts Council but was slow to let due to the relatively high rents demanded for the area, set initially at £20/sq ft. When the rents dropped to £15/sq ft to £17.50/sq ft more deals started to happen. There remains 12,000 sq ft of vacant space in the building.
Manchester City Council provided financial support for the scheme when the development funding market froze in mid-2008.
Gary Scorah, director of Commercial Properties Limited, acted on behalf of Argent and said there was strong interest from institutions. JLL acted on behalf Kames Capital. Scorah said: "Kames Capital sees the strength of the wider offer of Manchester's Northern Quarter, having purchased the Smithfield Buildings last year, it is clear they see the area as one of great potential. Kames views the Hive for what it is, the best quality office building of its kind in the area."
James Porteous, director, JLL, said: "This is a fantastic building with excellent sustainability credentials. We are delighted to have acquired this property for our client, Kames in what is fast becoming a very sought after location."
Kames Capital is a specialist investment management business, which manages £55bn of assets for UK and international clients.
Tenants at the Hive include the Arts Council England, 5plus architects, Gooey Creative, Join the Dots, Online Ventures Group, Fatsoma, Spacemen Creative, Bakerie Wine Store, Pie & Ale and the Studio.