The 280,000 sq ft historic Royal Exchange building in Manchester city centre has been bought by Starwood Capital Group in conjunction with Trinity Investment Management for £45m, reflecting a yield of 6.25%.
Owner M&G Real Estate, formerly known as Prupim, instructed GVA to sell the 1.7-acre site in January 2013, when the building produced an annual rent roll of £5.2m.
The property has a mix of retail, office and entertainment tenants. Major retail occupiers include Molton Brown, Moss Bros, Starbucks, Accessorize, Whittard of Chelsea and Swarovski. There is also retail space in the Royal Exchange Arcade which runs through the ground floor of the building.
The building was bought by the Prudential Assurance Company on 31 December 1968, and this is only the second time that the building has been sold since it was completed in 1729. M&G Real Estate is the property investment arm of Prudential, part of the M&G Group.
A large part of the Manchester trophy building is dominated by the Royal Exchange Theatre Company which occupies 43,500 sq ft.
The building also has six upper floors of offices which are largely vacant and comprise 81,700 sq ft.
Richard O'Boyle, executive director at Trinity IM said: "The Royal Exchange once embodied Manchester as a great trading city, and at its peak boasted over 11,000 members. Now that a significant portion of the building sits empty, we look forward to working with all stakeholders as we explore ways in which to elevate the Royal Exchange back to its rightful status within the city."
Adam Shah, senior vice president at Starwood, said: "This investment underlines our commitment to the City of Manchester, which remains a vibrant and attractive city in which to invest."
Starwood Capital Group is a global investment firm owned by more than 60 partners. The company's portfolio includes US-based Starwood Hotels & Resorts Worldwide, Westin Hotels & Resorts and Corus Bank. Last month it increased its UK assets with the acquisition of the De Vere Group.
Trinity IM is a privately owned specialist retail investor with assets that include Anglia Retail Park in Ipswich. Both businesses are based in London.
MMX advised Starwood and Trinity.