City centre mixed-use asset acquired for £14.7m

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Schroder Real Estate Investment Trust has acquired St Ann’s House in Manchester for £14.7m.

The deal for the mixed use office and retail asset reflects an initial yield of 7.8% and a low average capital value of £283 per sq ft, with the it generating £1.22m per annum of headline rent.

Nick Montgomery, fund manager at Schroder Real Estate Investment Trust said:”This acquisition is line with the strategy to selectively acquire income producing assets with good fundamentals and the potential to add value through active asset management initiatives, with a focus on improving sustainability credentials.”

The 51,885 sq ft building is 96% occupied and located on St Ann’s Square near to the retail core of Manchester city centre. It offers 40,2777 sq ft of office space over five floors alongside five retail units which are currently let to Watches of Switzerland Limited, trading as Tag Heuer, Russell & Bromley, health and beauty brand Space NK with two units currently available.

St Anns current office tenants pay an average of £18.65 per sq ft but Schroder Real Estate Investment Trust expects to be able to increase this through “refurbishment and improving sustainability performance” and also “to enhance income by offering fitted out office space”.

Montgomery added: “Compared to other major cities, Manchester, which is one of the Company’s high conviction locations, currently has the lowest office vacancy rate, and we expect relatively higher growth in office rents over the next five years.”

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