Deansgate property brought to market with offers sought of around £10m
A prominent office and leisure development on Manchester’s Deansgate has been brought to market for almost £10m.
The investment properties team at CBRE Manchester, acting on behalf of Swiss Life Asset Managers UK, is seeking offers in excess of £9.55m for 86 Deansgate.
It says this reflects a “topped up” net initial yield of 10% and a low capital value of £195 per sq ft.
Situated on the main Manchester city centre thoroughfare, 86 Deansgate has 48,967 sq ft of commercial space.
The five upper floors feature open plan, Grade A offices with flexible floor plates from 2,100 sq ft to 8,600 sq ft, with two ground floor prime retail units and a basement containing 19 parking spaces.
Multi-let to a range of professional office occupiers including Reed Recruitment, Slater Heelis and Resource Solutions, the property also has a vibrant ground floor presence with leisure operators Las Iguanas and Yours Restaurant & Bar in occupation.
The 12 occupiers provide excellent diversification of income, with 63% derived from the offices and 37% from the leisure.
Contracted passing income of £749,528 per annum reflects an average of £20.82 per sq ft over the offices and £30.81 per sq ft over the leisure.
With the current passing rents reflecting 50% discount to prime new build space, investors have opportunities to add significant value by reinvigorating 19,354 sq ft of available office space, as well as through active asset management with the existing tenants.
Additionally, historic planning permission could be implemented to create a two-storey ‘glass box’ extension to add a further 14,000 sq ft of Grade A space on the sixth and seventh floors.
With immediate access to Exchange Square, home to Harvey Nicholls and Selfridges, 86 Deansgate is in an area which is set to undergo significant investment and development as well as being part of the St Mary’s Parsonage Strategic Regeneration Framework.
Will Kennon, executive director, CBRE investment properties team, said: “The surrounding micro-location of Deansgate and St Mary’s Parsonage is on the cusp of some of the most exciting new commercial-led development with schemes such as Albert Bridge House (by Oval), Alberton (by Bruntwood), 39 Deansgate (by Candour) together with Property Alliance Group’s extensive mixed use redevelopment at Renaissance undoubtedly extending the city’s prime office core.
“86 Deansgate, which sits centrally in between these developments, is, therefore, set to be a major beneficiary, and we would expect the asset to benefit from substantial occupier demand and rental growth over the coming cycle.”
