Downing puts Capital on the block
ONE of the largest office buildings in Liverpool city centre has been brought to the market this week, according to PropertyWeek.com.
Downing Developments is to sell the 390,000 sq ft Capital building on New Hall Place on Old Hall Street.
The building has a guide price of £60.5m, which would reflect an initial yield of 8%. It was built in 1976 and is known locally as the “sandcastle” because of its yellow brick facade. Downing bought the development from Royal & Sun Alliance in 2006 for around £50m, in the city’s biggest-ever commercial property deal.
The company, which is owned by George Downing, is selling the property after completing a £10m refurbishment in 2009 and letting most of the space. Royal & Sun Alliance has its headquarters in the building and occupies 134,000 sq ft.
In February 2010 the UK Borders Agency, the government department that deals with immigration, took 220,000 sq ft on a 15-year lease that does not have a break until 2021. The Capital generates £5.1m in rent a year, but with rental uplifts this is could to rise to £5.5m in 2015.
There is a further 20,000 sq ft of retail and ancillary space. The buyer of the building would have the opportunity to develop it further. Downing received planning permission to extend the upper floors in 2007, although this has since expired.
The Capital also has foundations in place for a waterfront-facing development, such as a hotel or residential building. It is being sold through DTZ. In the past year no prime buildings have changed hands in Liverpool, and the last significant transaction was in 2009, when CommerzReal bought Mann Island for £49m.
Prime yields in the city are 35% lower than 2007 levels and now average around 6.75%.
