Property investor swoops for city centre office block in £6.25m deal
A six-storey Manchester city centre office block has been acquired in a deal worth £6.25m
Leicester-based property investment vehicle Custodian REIT purchased 60 Fountain Street, a 20,012 sq ft building which is a short walk from Piccadilly Gardens and Oxford Road station.
The property comprises basement parking and six floors let to Leyton UK, Meridian Healthcomms, Venditan and Fourthline, with a weighted average unexpired lease term to first break or expiry (WAULT) of 1.2 years and an aggregate rent of £406,704 per annum, reflecting a net initial yield of 6.10%.
The deal was funded from the company’s existing debt facilities, resulting in net gearing increasing to 25.2% loan to value.
Richard Shepherd-Cross, managing director of Custodian Capital Limited, the company’s discretionary investment manager, said: “We are delighted to have secured this high quality office building in a proven central Manchester location, which continues the pre-emptive deployment of proceeds from the sale of a portfolio of industrial properties due to complete later this month.
“The short WAULT provides potential asset management opportunities to enhance value and increase passing rent.”
The purchase came on the same day that Custodian REIT confirmed the agreed acquisition of Edinburgh-based Drum Income Plus REIT for £21.4m.
