In the latest case of local authorities going beyond their boundaries to build investment portfolios, Manchester’s Queens House has been acquired by Portsmouth City Council from CBRE Global Investors for a price reflecting a net initial yield of 4.75%.
The Manchester investment teams of CBRE, representing the vendor, and LSH, acting for the buyer, worked on the deal. Place North West understands that the sale price was just under £9m.
CBRE GI bought the 22,000 sq ft Queen Street building on behalf of clients in 2014, and invested £1.3m in a refurbishment project managed by OBI Property. Five of the six office floors are now fully let, with tenants committed to the building including Lexington North and digital agency e3creative, which initially took a floor then doubled its space within months in 2017.
John Clark, director of CBRE Global Investors, said; “The property was purchased as an opportunity to add value through refurbishing and repositioning the asset.
“The refurbishment provided city centre space with exposed services that has appealed to the growing number of tech and media companies located in Manchester. This sale brings the business plan to a successful close with the holding having produced strong returns for our client.”
Will Kennon, senior director in CBRE’s investment properties team in Manchester, said: “This prime office investment attracted more than ten credible offers to purchase the property ahead of the quoting level. We ultimately chose Portsmouth Council who performed in exemplary fashion.
“In light of the development and improvement of Lincoln Square, including 125 Deansgate, Brazennose House and Heron House, Queens House has excellent potential for Portsmouth City Council to benefit from increased rental and occupier demand in the medium term.”