The nine-storey, 41,000 sq ft office opposite the Renaissance Hotel, has been bought for around £11m, opening up the site for a potential redevelopment in the medium-term.
The building sits on the cusp of the site currently subject to a draft strategic regeneration framework, and while Kames plans to keep the building as office space for the short term, there are options to redevelop the plot as plans for the Renaissance comes forward.
The property was bought from Target Real Estate by the Kames Property Income Fund, and the fund’s manager David Wise said: “Our strategy is to continue the refurbishment of the office building on a rolling basis to create distinctive floorplates that will suit occupier requirements and will capture the rental growth that is evident for good quality space targeting cost-conscious occupiers.
“In the medium term, the property represents an attractive redevelopment opportunity with the City Council keen to promote taller buildings in this part of the city.”
He said “higher value uses” for the site included residential, PRS, hotel, and office space.
Current occupiers in the building, which was refurbished in 2016, include Harrington’s Advisory, which has around 4,600 sq ft on a three-year lease. The Flight Centre also has office space and operates out of one of its ground floor retail units. Other retail occupiers include Greggs and Ladbrokes.
In total there are 14 tenants in the building, and it has a long leasehold of 41 years with a fixed ground rent of £17,250 per year. Overall the building houses 28,400 sq ft of offices and 12,000 sq ft of retail.
The site falls within the possible Renaissance Hotel strategic regeneration framework, which was outlined by Manchester City Council earlier this month.
Although opposite the hotel site itself, 39 Deansgate has been earmarked as a potential redevelopment site as part of the wider regeneration of the area, which include proposals for a five-star hotel, 600 apartments, retail, and extensive public realm.
Urban & Civic is acting as developer for the Renaissance site, with Glenn Howells as architect.
Metis acted for Kames Capital, while Knight Frank acted for Target Real Estate.