101 Embankment bought for £105m

The newly-built office block 101 Embankment in central Manchester has been bought by M&G Real Estate for £105m at a net yield of more than 5.3%.

The acquisition by the real estate investment company is a three-party joint venture on behalf of its Capital Solutions business headed by Martin Towns.

The purchase of 101 Embankment, at the heart of the Cathedral District, has been made on behalf of M&G Real Estate’s UK core commercial property strategy in partnership with an Asian investor and West Yorkshire Pension Fund, one of the UK’s largest pension funds.

101 Embankment is the new head office of insurance firm Swinton, which has been let on a 10-year term.

The high-specpremises include a 442-space car park, let to Q-Park on a separate 35-year term.  The leases include guaranteed rental increases.

Towns, head of Capital Solutions, M&G Real Estate, said: “There is an increasing trend in global real estate for large institutional and sovereign wealth investors to partner with established fund management companies through joint ventures and separate accounts.

“We believe in investing time to truly understand our clients’ unique preferences and requirements, using our skills and experience to create bespoke strategies and investment opportunities that work for them.

“We are delighted to be working with West Yorkshire Pension Fund and a leading Asian investor to help them meet their real estate investment objectives, whilst also enabling our UK core commercial property strategy to access a highly attractive asset.”

Simon Edwards, alternatives investment manager of West Yorkshire Pension Fund, added: “We are very happy to be entering into this long-term partnership. Thanks to M&G Real Estate’s expertise in sourcing and structuring this deal, we stand to benefit from stable returns from a high quality asset and meet the strategic objectives of our fund.

“With 100 real estate investment professionals in the UK and offices across Europe and Asia, M&G Real Estate has the expertise, resources and track record to deliver attractive, off-market opportunities for domestic and international institutional investors.”