The council has agreed to forward fund the construction of the 175,000 sq ft Salford building being developed by the English Cities Fund consortium, and acquire the property when it completes.
Warrington Council’s investment in the office block comes after the authority shelved plans in April to buy a chunk of US investor Harbert Management Corporation’s 4.4m sq ft Trafford Park portfolio for £220m.
However, it has now agreed a £112m financing agreement with English Cities Fund that will pay for the construction of the building, to be occupied by telecommunications firm BT under a lease agreed this month.
Warrington Council, which in 2017 acquired the £200m Birchwood Park, said it considered six criteria when assessing the investment opportunity, including length of lease, property location, portfolio balance, tenant covenant strength and ongoing management provisions, according to a public notice of the agreement.
“Having explored a number of opportunities, this development satisfied all those key criteria over and above any other opportunities put to the council at the point of investment,” the notice said. The council will acquire the property through a 250-year lease when its construction is complete.
Earlier this month, BT signed a 20-year lease earlier this month to take the whole building, designed by Make Architects.
Bowmer + Kirkland is carrying out ground work on the site of Four New Bailey but a main contractor for the construction of the 10-storey block is yet to be appointed.
English Cities Fund is a joint venture between Muse Developments, Homes England and Legal & General.
The consortium is delivering the wider New Bailey mixed-use scheme under a development agreement with landowner Salford City Council, signed in December 2006.
Muse Developments and Warrington Council declined to comment. Salford City Council has been contacted for comment.