Swiss Life to offload Manchester office 

Offers of £9.55m are being sought for the 49,000 sq ft 86 Deansgate. 

Swiss Life Asset Managers has appointed CBRE to sell the six-storey Manchester office building. 

The upper five floors provide office space let to the likes of Reed Recruitment, Slater Heelis, and Resource Solutions, while the ground floor units are let to Las Iguanas and Yours Restaurant & Bar. 

Will Kennon, executive director in CBRE’s investment properties team, said development activity in the vicinity makes 86 Deansgate an attractive prospect. 

“The surrounding micro-location of Deansgate and St Mary’s Parsonage is on the cusp of some of the most exciting new commercial-led development with schemes,” he said. 

These include Oval Real Estate’s redevelopment of Albert Bridge House, Bruntwood’s Alberton, and Candour’s proposed overhaul of 39 Deansgate. 

These schemes, as well as Property Alliance Group’s mixed-use redevelopment of the Renaissance site, “undoubtedly extend the city’s prime office core”, according to Kennon.  

“86 Deansgate, which sits centrally in between these developments, is therefore set to be a major beneficiary, and we would expect the asset to benefit from substantial occupier demand and rental growth over the coming cycle.” 

At present, 86 Deansgate generates a passing rent of £749,528 a year – an average of £20.82/sq ft from the offices and £30.81/sq ft over the leisure. 

This level of rental income amounts to a 50% discount to prime new build space, according to CBRE, which presents would-be investors with the opportunity to “add significant value by reinvigorating 19,354 sq ft of available office space, as well as through active asset management with the existing tenants.   

The building also benefits from a historic planning permission for a 14,000 sq ft rooftop extension. 

A sale at the asking price would reflect a “topped up” net initial yield of 10% and a capital value of £195/ sq ft.