Chester Exchange changes hands in £8.8m deal

KNIGHT Frank Investment Management has bought The Exchange mixed-use block in Chester on behalf of insurer, the Ecclesiastical Insurance Group.

It has paid Opus Land £8.8m, which represents a net initial yield of 7.3%.

The scheme is anchored by a 60-bed Travelodge Hotel, and other tenants include Pizza Express and the Pitcher & Piano bar.

The property is said to offer a weighted average unexpired lease term of 14-and-a-half years and generates an income of £686,801 a year.

Originally the city’s Telephone Exchange, the property also comprises three floors of Grade A offices.

John Styles, head of fund management at Knight Frank Investment Management, said: “This acquisition fulfils a number of investment objectives for Ecclesiastical Insurance Group. The inflation-linked income matches future pension fund liabilities, whilst there is potential for growth in the office rents and letting the vacant space to enhance returns.”

Opus Land was represented by GVA while Savills advised Knight Frank.