The Regional Office Property Unit Trust, advised and managed by Schroder Real Estate, has acquired 340 Deansgate in Manchester for £8.4m.
340 Deansgate, built in 2007, totals 26,500 sq ft over ground and five upper floors. The property is part let across its top four floors, totalling 16,000 sq ft, to Begbies Traynor on a lease to 2027. Approximately 10,500 sq ft is currently vacant.
The price reflects a net initial yield of 4.6%, increasing to over 7% once let and a low capital value of £315/sq ft.
Schroder was advised by Metis, while JLL advised the private seller.
340 Deansgate was built in 2007 by a joint venture between Chancerygate and Tyburn Lane Private Equity, after buying the site from Property Alliance Group.
Tom Newman, investment manager at Schroder Real Estate, said: “This acquisition which follows our recent purchase of the nearby No.1 Spinningfields, offers a good quality office building in an improving location within Manchester city centre. We will reposition the building through a high quality refurbishment of the ground and first floors and look to capitalise on the growth in Manchester rents.
This is the eighth acquisition for the Regional Office Property Unit Trust that is targeting assets offering good fundamentals in strong and undersupplied regional cities and towns. There is £150m of funding available for immediate investment with target lot sizes of £7m to £35m.”
Andrew Hilbourne, director at JLL, commented: “The successful marketing of 340 Deansgate again demonstrates the strong demand for opportunities in Manchester, particularly where there are asset management opportunities for an investor. The level of interest from a wide variety of types of purchaser allowed us to achieve an excellent result for our client.”