Helical Bar buys Churchgate House for £34m
LISTED property investment group Helical Bar has announced a £34m off-market deal to buy interlinked office buildings Churchgate House and Lee House on Oxford Street, Manchester.
The vendors, US private equity firm Angelo Gordon and Dunedin Property, look to have made a tidy profit on the properties having acquired them in August 2012 for a reported £23m.
Helical Bar said the purchase price reflects a net initial yield of 5.7% and the transaction would be funded through a combination of cash and existing undrawn debt facilities.
Grade II listed Churchgate House and Lee House provide around 250,000 sq ft of multi-let office accommodation, at rents between £14.00 and £17.50 per sq ft.
A number of tenants extended their leases over the last 18 months, however, there is currently circa 35% vacant providing Helical with opportunities to improve income through letting up space.
Duncan Walker, investment director at Helical Bar, said: “This is an exciting acquisition for Helical. Following the recently announced sale of Battersea Studios, we are very pleased to be able to quickly recycle the capital into a property where we see opportunity for good cash flow and capital growth.
“Churchgate and Lee House represents a high quality, well located multi-let asset in a market that is starting to show the early signs of improving occupational demand underpinned by economic growth across the UK.
“We believe this asset lends itself well to the Helical model and track record of successfully repositioning and improving assets through intensive management. As such, through improvement of vacant floors and the continued refurbishment of the common parts, we will be able to offer quality accommodation at affordable rental levels that we hope will enable us to secure new lettings in the near term.”
