Leeds office park buildings sold for £18m

Property developers Sterling Capitol have sold a quintet of Leeds office park buildings in a deal worth £18m.

The Capital Park buildings, totalling 95,913 sq ft, were sold to London-based property investment company Squarestone for £18.23m.

The offices are occupied by NHS, Barratt Homes, Henderson Insurance Brokers and Hermes. The combined rent roll is more than £1.7m a year, reflecting a NIY of 8.9%.

The deal was brokered by the Leeds office of global property consultancy Knight Frank, who represented Sterling Capitol. Squarestone were advised by Allsop.

Graham Foxton, investment partner with Knight Frank, commented: “This deal graphically illustrates that the Yorkshire region continues to be popular with investors and occupiers and underlines that well-located buildings on strong leases will always prove attractive.

“Capitol Park is within minutes of Junction 28 of the M62 and within five minutes of Leeds city centre. To the investor, it offers an excellent covenant strength in superb buildings and a history of commitment given that the majority of the tenants have been there since construction and have renewed their leases recently.

He explained: “Sterling Capitol have a fantastic track record of developing quality business parks in strategic locations in Yorkshire. This deal is both a testament to the company’s achievements and a passport to future success.”

Mike Heydecke, director of Sterling Capitol, said: “This major sale of five high-quality buildings is a very important for us, as it allows us to concentrate on future developments at all of our motorway business parks at Leeds, Barnsley and Goole. We have some extremely exciting plans agreed, which will create much-needed business space and jobs in both West and South Yorkshire.

“Capitol Park itself is a tremendous success story and recent lettings and deals have taken it to the 1,600 jobs target for Phase One. It is one of the brightest stars of the Yorkshire out-of-town business park sector and continues to attract first-class tenants.”

Hugo Denée, head of acquisitions at Squarestone commented: “We are very pleased with the acquisition which satisfies our business model in acquiring good quality real estate around the UK. The park offers good quality income with future regear opportunities and a real value add potential that the additional development site will bring.”

Legal advice was provided by Jim Speed, Partner at DWF, for Sterling Capitol and by Andrew Martin, partner at Addleshaw Goddard, for Squarestone.