Schroders continues City Tower ‘repositioning’ with rental growth

The National Institute for Health & Care Excellence has signed for a further 10 years on its 46,350 sq ft office in Manchester’s City Tower, with landlord Schroders negotiating a 15% increase in rent to £21/sq ft.

NICE is paying a total rent of £973,350 each year for its podium-level office.

City Tower owner Schroders has also agreed a 10-year lease with Charterfields Chartered Curveyors for 1,247 sq ft on the 22nd floor, a letting which doubles Charterfields’ occupation within City Tower and reflects a rent of £25/sq ft.

In February, Schroders announced it had secured new lettings and regears with more than five tenants, including an 18,000 sq ft regear to Hays and a new 9,000 sq ft lease with iHub.

City Tower is owned in a joint venture held between Schroder Real Estate Investment Trust, Schroder UK Real Estate Fund and Immobilien Europa Direkt. The tower totals 340,000 sq ft of offices.

Tom Newman, investment manager at Schroder Real Estate, said: “Securing these new long-term lettings at City Tower further validates our strategy to reposition the asset and take advantage of the city centre’s rental growth, delivering strong returns for our investors. It also provides a good example of our winning cities approach, as the attributes of diversification, modern infrastructure and quality of life means the asset is well positioned to out-perform in the coming years, as both a beneficiary of a more independent UK and in a period when new commercial development is likely to be fairly modest.

“We continue to see strong occupier demand from a diverse range of tenants for the good quality commercial space that we have created, as well as ongoing interest in the recently refurbished spaces. Our strategy for the asset remains focused on more lettings, whilst further enhancing the retail offer and where possible, investment into the wider realm for the benefit of City Tower and the surrounding environment.”

Colliers International and CBRE act as leasing advisers to Schroders.

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