One Snowhill sold to German real estate group in multi-million deal
THE home of KPMG and Barclays in Birmingham, One Snowhill, has been sold in a multi-million pound deal thought to be one of the largest in the city’s history.
The Grade A office block, which comprises approximately 24,500 sq m of rental space, has been sold by Commerz Real to Germany’s Union Investment Real Estate.
Union Investment committed to the deal after being impressed by the strength of the city’s office market, which it believes will continue to improve.
Completed by developer Ballymore in 2009 and acquired in 2010 by Commerz Real for its open-ended real estate fund hausInvest, the office block will become part of the Unilmmo: Europa open-ended real estate fund operated by Union Investment.
The value of the deal has not been disclosed but estimates are believed to place it around the £125m mark.
Union Investment said the 12-storey building, which has a BREEAM rating of “Very Good”, benefitted from long-term leases to financially strong tenants such as KPMG, Barclays Bank and law firm DWF. The current occupancy rate is 94%.
“In addition to stable returns, the excellent and highly accessible location in Birmingham’s commercial centre with direct train links to London and the West Midlands combined with the high construction standard of One Snowhill make this a core investment,” it said.
Martin Brühl, head of International Investment for the new owners, said: “We are acquiring one of the best office buildings outside London in One Snowhill. After investments in Manchester, Glasgow and most recently Cardiff, this opens up another important regional location in the UK, thereby continuing an investment strategy which is adapted to the growing strength of the London investment market.”
One Snowhill contributes to the regional diversification of the Europa fund’s UK portfolio, which currently consists of three properties worth around €520m (£438m).
Union Investment added: “As the UK’s second largest city, with approximately one million inhabitants, Birmingham has a broadly diversified, dynamically evolving economy with an emphasis on the automotive and financial services industries. Rents are forecast to increase in the Birmingham office market over the next few years, especially in the core segment.”
