Schroders seals £200m No.1 Spinningfields deal
Allied London’s recently completed development, No 1 Spinningfields, has been acquired by clients of Schroder Real Estate for over £200m, reflecting a net initial yield of 5%
No.1 Spinningfields is the final piece of the Spinningfields masterplan, developed by Allied London in partnership with Manchester City Council.
The building provides 310,000 sq ft of mixed use high quality accommodation with PwC the largest office occupier and a new roof top restaurant let to D&D.
The building was 87% pre-let prior to practical completion and is also the tallest commercial building to be constructed in Manchester in half a century.
The Spinningfields masterplan was drawn up in 1997 by Allied London with the intention to regenerate 22 acres of land sandwiched between Deansgate and the River Irwell, creating a new and vibrant commercial area for Manchester. Now 20 years on, Spinningfields is Manchester’s commercial heart and hailed as one of the most successful European regeneration projects, with a population of over 30,000 people and 6 million visitors per year.
Schroder Real Estate has acquired the property with two strategic partners, Finnish pension manager Ilmarinen and another global institutional investor.
Michael Ingall, Allied London chief executive, said: “We have a long-established relationship with Schroders that goes back to the late nineties when we worked on several joint ventures. We are delighted to have two strong international investment funds under their management invest in what is without doubt one of the best pieces of commercial real estate in the UK.”
Chris Reay, property director at Allied London, said: “Our aim was always to create and then manage a world class business building for Manchester. Our tenant line-up is clearly evident that we have delivered this. We are delighted that Schroders has appointed our property management vehicle, ALL+ to manage the building going forward and ensure the delivery of our vision.”
Schroder Real Estate was advised on the purchase by Metis Real Estate, Norton Rose Fulbright and MHBC. Allied London was advised by Shoosmiths.
Nick Montgomery, head of UK investment at Schroder Real Estate, added: “No 1 Spinningfields is a best in class building in a high quality, mixed-use development. The investment is consistent with our strategy of acquiring assets with strong fundamentals in Winning Cities where we expect higher levels of growth. Schroder Real Estate is a long-term investor in Manchester and this acquisition on behalf of international strategic partners illustrates our continued commitment to the city.
“In the short term our key priority will be to work closely with Allied London and capitalise on the strong leasing market in Manchester in order to let the remainder of the building.”
Schroder Real Estate was advised on the purchase by Metis Real Estate, Norton Rose Fulbright and MHBC. Allied London was advised by Shoosmiths.
OBI advised Allied London on all leasing.
