German real estate firm buys city centre offices
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GERMAN real estate PATRIZIA UK has bought Linley House in central Manchester for £12m at a net yield of 7%.
The purchase of the 85,sq ft building on Dickinson Street, off St Peter’s Square follow’s PATRIZIA’s acquisition in May 2015 of the 20-acre mixed-use First Street site and represents part of the company’s “value added” strategy.
Nine-storey Linley House is just under 95% let and provides refurbished Grade A office space to occupiers such as Electricity North West, property conveyance business My Home Move, and London School of Business and Finance, producing a combined passing rent of £890,000 per annum and with a three-year lease.
This already established area of Manchester is now also set to benefit from the development activity surrounding Oxford Road, creating a new prime area with strong rental growth over the next three years.
Rob Brook at PATRIZIA said: “Manchester continues to generate excitement in the office market.
“PATRIZIA UK has always been interested in assets that offer the opportunity for driving rental growth and place making through active asset management, and on the verge of prime Linley House marks the ideal next step into the Manchester office market.”
JLL advised on the deal. James Porteous, capital markets director at JLL, said: “We have seen a range of institutional investment into refurbished accommodation and there continues to be a strong occupational demand which will undoubtedly generate significant rental growth for high quality assets across the city.
“The building is occupied by a strong mix of tenants and has genuine reversionary lease potential. In addition the Oxford Corridor improvements and extension of the prime office core at St Peter’s Square will also add to Linley House’s existing prospects as a city centre asset.”