Exchange Flags Feb 2019

Hong Kong investor eyes £70m Exchange Flags buy

Charlie Schouten

The 360,000 sq ft building in Liverpool is understood to be under offer with a quoting price of around £70m, around two years after it was purchased by Shelborn Asset Management for £42m.

Place North West understand s the building has been under offer from a private individual investor, based in Hong Kong. If the deal completes, it will be one of the largest property transactions in the city since L&G’s purchase of the India Buildings for £125m in August 2017. Sources close to the deal said the deal had “gone quiet” since the start of the year but could yet go ahead.

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 the Vincent Café; 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.

A purchase at £70m would reflect a net initial yield of 7.82% and a capital value of £195/sq ft.

If the deal completes, it will be the fourth time the building has changed hands in the last 20 years.

Exchange Flags was bought by UK Land & Property and Pochins from Bill Davies’ Walton Group in 2006 and refurbished at a cost of £22m before being taken on by Hudson, on behalf of private equity fund Lone Star, as part of a legacy property debt purchase from the Irish Bank Resolution Corporation.

Sherborn Asset Management then bought the building from Hudson for £42m in November 2016.

Worthington Owen is the letting agent for Exchange Flags, while Knight Frank is acting on the sale.

Your Comments

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I love this building.

By Elephant

One of many beautiful buildings in this lovely City

By Dan

Don’t exaggerate Dan, it’s not exactly Dublin is it?

By PDM

Overseas investors ploughing into Liverpool.. The market is turning. God help us all.

By Doomsday

It is all about the Liverpool city centre. City region sounds very good, but only for Liverpool. Merseyside has never worked.

By Heswall

@Heswall so a office block has been sold in Liverpool and you spout out the same sentence over and over , you dont make any sense
Liverpool is thriving and it hurting you ?

By Sam

@PDM, we have more beautiful buildings than you think. Are you just a troll or do you live in Lower Heswall?

By Just saying

PDM, Liverpool has more and better architecture than Dublin. What is doesn’t have that they do is the focus and prioritisation for investment that comes from having control over your own destiny. Instead it’s had decades of fake concern and barely concealed land grabbing dressed up under the banner of northwesternism eminating from that supposed region’s powerbase inside the M60 inflicted on it.

By North Shore

Goodness me, you are such a troll regarding Liverpool city developments Heswall! I also live in Heswall and I do not see how on earth this is a negative for the rest of the Liverpool City Region. If you are wondering what Wirral gets then go bother WMBC about their activity. WMBC have put forward plans, though I am sure Knowsley are going to ask – it is all about Birkenhead – what has WMBC done for us lately!! If Liverpool and Wirral were to merge then it would make perfect sense to ask what will be done Wirral-side. I think Liverpool City Region works fine and needs a strong city core. Incidentally, the metro mayor is lowering toll costs, so the one person who DOES have some, albeit limited, powers across the region is doing something.

By Chris

Every post about Liverpool has a little whinge from Heswall, very silly really. Anyway this is a beautiful building, one of many in Liverpool.

By Liverpolitan

I suppose it’s better than Barcelona and London too hey? Give my a break, deluded is the word they use.

By PDM

PDM. I fail to get your comments about comparing Dublin with Liverpool. From visiting both cities I find very little difference. Both have Georgian quarters, both have Customs houses and are near the sea. I can’t think of two other cities so similar.

By Elephant

@Chris, yes! Liverpool City Region does work fine and trolls that call themselves Heswall don’t like it. Incidentally Liverpool has a many many buildings even better than Exchange Buildings. More Grade I listed buildings than anywhere else in the north certainly! And a much more exciting cityscape than Dublin even though I love Dublin.

By Roscoe

The strengthening of Liverpool will in turn have a positive impact on the Wirral. It is great to see overseas money investing in the city. Less of the negativity

By From Heswall (Lower)

Dublin is way more successful than Liverpool though, just look at the house prices, nobody can deny that

By Todd

@Todd, it’s the capital city of its country, it’s a great city. But Liverpool is equally if not more beautiful from an architecture perspective, and is certainly on the up. Like others have said, its not a dig at either, less of the negative vibes!

By John

@Todd Dublin’s a great city but let’s not over-egg the success comparison, it’s a national capital. The EU also had plenty to say about the tax breaks Eire introduced to create its tiger economy!

By LEighteen

Agree with John. Love Dublin but for architectural grandeur Liverpool has the edge on all large cities with the exception of Edinburgh in the British Isles.

By Elephant

Liverpool will never compare to Baile Átha Cliath

By Ballymun 11

Liverpool and Dublin are sister cities, they’re different but the people feel at home in each other’s place.
Only Porto in Europe has a cityscape as dramatic as Liverpool.

By Roscoe

Dublin and Liuerpul are old friends over many centuries, my family(and many others) come from there and there is a unique bonding between the two.
Let not anybody try to come between us we are twin cities in more than name.

By Dickie Sam

Whatever Roscoe is on, I want some

By Want

I don’t know why people feel the need to troll Dublin on an article about a building in Liverpool. Let’s be honest Dublin is one of the great European cities, amazing history and culture, the best literature, now it’s absilutely booming in a way only London does but without the homeless problem the UK has. Let’s have a bit or realism on here for once.

By Gilbert

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