M&B headquarters sold for second time in 15 months
THE central Birmingham headquarters of pubco M&B has been sold to Legal & General Property for £69.5m.
The sale means that existing owner LaSalle Investment Management, which bought the building in February last year for £51m, has made a profit of more than £18m in 15 months.
L&G’s acquisition, on behalf of its LPI (Limited Price Inflation) Income Property Fund also includes the associated Ibis hotel situated on Fleet Street and Lionel Street in Birmingham.
The deal reflects a net initial yield of 3.94%.
It has bought the freehold of the headquarters building so M&B will remain as its tenant. Mitchells & Butlers signed a leasehold deal for for 35 years from January 2009 with RPI-linked rental increases.
The Grade A office building was purpose built for Mitchells & Butlers in 2003 and extends to 95,000 sq ft.
The property also benefits from three levels of basement car parking, comprising 278 spaces, together with a 120 bedroom Ibis Styles Hotel which was rebranded and refurbished in 2014.
Derek Gilby, senior fund manager at Legal & General Property, said: “The first major regional city centre office asset for the fund, we believe that Birmingham is set to benefit from a number of significant infrastructure projects already underway and the asset is well positioned to gain from the regeneration of the adjacent Paradise area which is undergoing a rapid transformation.
“Mitchells & Butlers offers the fund a strong tenant covenant, providing secure, inflation-proofed income over a long lease term, yet with the benefit of market rental upside.”
JLL acted for LaSalle Investment Management on the deal, while CBRE advised Legal & General Property.
