After buying the 40,500 sq ft 39 Deansgate in early 2018, Kames Capital has advanced plans to replace it with a new-build office of up to 14 storeys, adding to Manchester’s commercial pipeline.
Place North West revealed Kames Property Income Fund had bought the building for £11.1m from Target Real Estate in March last year; at the time of its purchase the fund had already flagged it was looking to redevelop the site in the medium-term, and has now advanced plans to replace it with a new commercial offering.
Last year, the company had sounded out potential uses as a hotel or residential, but has now decided to bring forward a 14-storey office on the prominent plot on the corner of Deansgate and Market Street. A building control application has now been submitted to Manchester City Council ahead of a full planning application in the coming months. This will also include commercial or retail use at ground level.
In March 2018, David Wise, Kames Property Income Fund manager said: “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.”
Tenants at the building, which was refurbished in 2016, include Investar Property, which has a five-year lease on a 2,300 sq ft space. Harrington’s Advisory previously had 4,600 sq ft on the second floor but has since moved out. The Flight Centre also has office space and operates out of one of its ground floor retail units.
Other retail occupiers include Greggs, while Ladbrokes was formerly on the ground floor but has recently departed.
At the time of Kames’ purchase, 39 Deansgate had 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; most recent quoting rents for the office stood at £14.50/sq ft.
The building was formerly owned by Royal London Asset Management before being bought by Target Real Estate in 2015, before changing hands again to Kames last year.
The site falls within the possible Renaissance Hotel strategic regeneration framework, which was outlined by Manchester City Council. 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 the developer for the Renaissance site, with Glenn Howells as architect.
Kames Capital was contacted for comment.