Embankment, M&G Real Estate, p CBRE

CBRE is marketing 101 Embankment on behalf of M&G Real Estate. Credit: via CBRE

Salford’s 101 Embankment hits market for £80m

M&G Real Estate has put the 179,500 sq ft office block up for sale at a guide price that represents a net initial yield of 8.45%.

The £80m guide price for 101 Embankment is £25m less than what M&G paid for the building in 2017.

101 Embankment sits off Cathedral Approach on the outskirts of Manchester city centre. The building was constructed in 2017. Situated just over the River Irwell in Salford, the building also includes a multi-storey, 422-space car park in its basement.

That car park is operated by QPark. According to CBRE, which is marketing 101 Embankment for M&G, yearly office car parking rents around Manchester city centre range from £3,000 to £3,500 per space.

On the market is the long leasehold for 101 Embankment, with Network Rail owning the freehold. The long leasehold is for 250 years and began in January 2014. The owner pays a peppercorn rent to Network Rail.

Most of the office block is let, with tenants including Swinton Insurance, Covea Insurance, and Sainsbury’s. The WAULT is 10.2 years, with the office spaces having an average passing rent of £30.98/sq ft.

There is one retail unit unlet, and two floors. Those floors underwent a £890,000 refurbishment that completed in January. Upgrades were made to the HVAC system, LED lights were installed, and the WCs were tweaked.

101 Embankment’s reception area also underwent a £1.3m refurbishment that concluded in January. This included the creation of informal meeting spaces, a mezzanine events space, and improvements to the cycling and shower facilities.

The entire building has an EPC rating of B and is BREEAM Excellent.

CBRE, which is accepting offers of more than £80m for the building, noted the potential 101 Embankment offers to a future buyer. Situated within easy access to Victoria Station and the tram network, it is well connected.

It is also worth noting that 101 Embankment sits adjacent to 100 Embankment, which is owned by Salford City Council. Deloitte, Ridge, and Aecom have signed on for space at 100 Embankment. This has established the wider Embankment development as a go-to office location. Headline rent at 100 Embankment is £35/sq ft, which builds the case for an increase in the rent at 101 Embankment.

Adding to that: Manchester city centre rents are expected to reach £50/sq ft within three years, according to CBRE. That means there is a potential for rental growth as rent reviews take place and new tenants come in.

The broader office market in the Manchester area is in good health, with more than £2bn-wroth of transactions taking place within the last five years in the city centre – and £300m deals completed in 2023. Take up in the city centre was 946,200 sq ft last year.

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