HSBC building in Birmingham city centre sold for tens of millions
AVIVA Investors has concluded the sale of the Exchange Buildings in central Birmingham – home to HSBC – in a deal reflecting a net yield of 4.5%.
The deal, on behalf of Aviva Life and Pension UK, is for an undisclosed sum but some observers have suggested a figure of £40m.
The yield is understood to be one of the keenest paid for a retail asset in Birmingham during this cycle.
Exchange Buildings sits directly adjacent to Grand Central Shopping Centre and New Street Station. It has been sold to Orchard Street Investment Management on behalf of St James’s Place Wealth Management.
The scheme, fronting both New Street and Stephenson Place, comprises four retail units extending to 25,853 sq ft, anchored by HSBC and McDonalds, and a 140 bedroom Premier Inn Hotel.
Julian Cobourne, asset manager at Aviva Investors, said: “The deal was the culmination of a carefully managed asset management programme, undertaken over a number of years. Firstly, to pre-let and refurbish the tower element of the property, which was successfully achieved to Premier Inn Hotels.
“This was followed with a re-gear of the head lease with the governors of King Edward Sixth School in Birmingham, increasing the unexpired head lease term from 56 to 200 years.”
Tom Chadwick, investment transactions manager at Orchard Street, said: “The Exchange Buildings occupy an excellent position in the heart of Birmingham’s retail core offering both income security, with a WAULT of 14 years, and access to rental growth following the adjacent redevelopment of Grand Central and the entrance of new occupiers, such as Apple, to the Birmingham market.”
Acting on behalf of Aviva Investors, Ben Kelly, capital markets director from JLL’s Birmingham office, said: “Our client considered that with the completion of the asset management plan, it was an optimum time to dispose of Exchange Buildings at a premium.
“Clearly the development of New Street Station, Grand Central and the opening of the new John Lewis also played a critical part of not only the timing of sale, but the positive message we were able to present to prospective buyers.”
GBR Phoenix Beard acted on behalf of Orchard Street.
