Chancery Place and Ship Canal House are the latest Manchester office blocks to come to market as owners seek to cash in on the resurgent investment market in the city.
Chancery Place off King Street and Spring Gardens is on the market for £52.1m, a 5.5% yield. The 106,000 sq ft office at 50 Brown Street is being sold by Alanis Capital, with JLL appointed to market the property. The building is currently fully let and tenants include Clyde & Co, HSB Engineering and Clearwater Finance. The property brings an income of £3m a year, with a rental value of £28/sq ft.
Anglo Irish Bank provided £28.7m to redevelop the site, which was originally the location for the Scottish Provident building. The plot was bought by a consortium of Irish developers in 2006 for a reported £9.5m, and the building was completed in 2008. Anglo Irish Bank was wound down during the recession.
Meanwhile, Himor Group has put the 72,500 sq ft Ship Canal House in King Street up for sale with a price tag of around £25.5m. The building was bought by Himor for £22.8m in 2011 from Catalyst Capital. The 10-storey office block was built in 1924. Tenants are charged rents of up to £25/sq ft. WHR Property Consultants is acting for Himor.
Universities Superannuation Scheme has also put the 55,000 sq ft Observatory on Cross Street on the market. The Observatory currently has three out of eight floors vacant. Tenants include Nationwide and Ward Hadaway.
Many UK and overseas investors are put off by the overheated London market and are increasingly spreading their interests to Manchester and other regional cities.
Recent significant office sales in Manchester city centre include Gateway House in Piccadilly, which is under offer by LaSalle Investment Management for £26m from Realty Estates. St James's House in Charlotte Street was bought by BA Pension Fund for £21m from Stephen Elias, while 86 Deansgate was bought by Mayfair Capital for £15m from Phil Hodari. Last week, it was announced that the two RBS buildings in Spinningfields had been sold for £320m to M&G Real Estate by administrator EY.