City Council swoops for Grade A offices in £11.2m deal

Nottingham City Council has bought Pembroke House and Donington Court on Pegasus Business Park in Castle Doningtonin an £11.2m deal

The two buildings are made up of 64,640 sq ft of Grade A office space situated next to East Midlands International Airport.

Savills acted on behalf of owners Harpin.

City Council Leader, councillor Jon Collins, said: “We have used our ability to borrow at preferential rates to invest in these properties as part of our wider commercial property investment portfolio. By investing in low-risk properties that give us a good rate of return like this, we can continue to fund local services which might otherwise be affected by Government cuts to our budget.

“We have seen our main Government grant drop by over £100m in the last six years, and like other prudent councils we are looking at alternative ways like this to bring in an ongoing income to the council to safeguard services and invest in our city.”

The sale follows three recent lettings at the park, which will contribute to the combined annual rental income. Air Logistics Limited has agreed to a new 10-year lease for 7,369 sq ft on part of the second floor of Unit 2A Donington Court, whilst Wates Construction has also agreed to a 10-year lease for 6,040 sq ft on part of the ground floor.

HSBC Bank has agreed to new 10-year lease for space in Donington Court totalling 6,232 sq ft and will occupy the west wing of the second floor in the three storey office building.

Victor Ktori, head of office at Savills Nottingham, said: “These two buildings at Pegasus Business Park provided Nottingham City Council with an excellent opportunity to acquire a strong income producing asset. What’s more, the scheme is underpinned by the adjacent SEGRO Logistics Park development, which is set to attract a wide range of commercial occupiers to the area, re-establishing it as a top business location and undoubtedly adding value to the existing scheme. We are now bringing forward the UPS investment on the Park and anticipate strong interest.”

Air Logistics was advised by Measures and Company, HSBC was advised by CBRE and Wates Construction was unrepresented.