City centre building snapped up in £12m deal

Credit: JLL

Property investment and development firm Town Centre Securities has snapped up a Leeds city centre building for £12m.

The Leeds-headquartered listed company has acquired The Cube on Albion Street, from Aviva. 

Contracts have been exchanged, with completion of the purchase set for 1 October 2018. The purchase will be funded from TCS’s existing resources and planned disposals. TCS said its re-financing of Merrion House in July this year gave the firm “considerably greater financial flexibility.”

The Cube is located opposite the Merrion Centre, which is TCS’s largest asset. It is a refurbished and extended former 1960s office building, comprising of 22,000 sq ft of ground floor leisure units with leases to Hard Rock Café and Mecca Bingo, together with 50,000 sq ft of offices over three floors let to Capita and the Government.

It also includes the freehold for 84 apartments which are leased to Persimmon Homes at a peppercorn rent.

TCS said: “The acquisition is consistent with our focus on true mixed-use assets and lowering our exposure to retail, which has helped ensure we have been protected from the worst of the turmoil on the high street.

“The purchase price of £12m represents an initial yield of over 12.5% on the passing income. With lease expiries in 2019 and 2020 the yield will reduce to around 9%, a strong and sustainable return for a city-centre asset.”

Edward Ziff, chairman and chief executive, said: The Cube represents a strategic acquisition for TCS, as we further expand our ownership in Leeds, with its proximity to the Merrion and other key destinations in the City Centre. It will provide us with asset management opportunities and importantly the additional income will help mitigate the effect of further asset sales that we plan from our portfolio. 

“This transaction demonstrates our ambitious growth plans, and the momentum that we are building with both our exciting development pipeline and strategic acquisitions such as The Cube and Ducie House, in our Piccadilly Basin development.”

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