£62m city centre office up for sale
Landmark Leeds office building The Pinnacle has put on the market for £62m, and is one of the largest opportunities of its type in the region.
The building which was once Leeds city centre’s tallest office tower and sits at the heart of the city on Bond Street, was acquired in 2018 for around £65m in a joint venture between a fund advised by Brockton Capital and Dunedin Property, from a US-based private equity firm.
Since then the 147,000 sq ft, 20-storey mixed use property has been used to secure a £42.7m loan.
The office has remained popular post-pandemic with Knight Frank advising on three new lettings in quarter two of this year totalling over 10,000 sq ft at the site, with the leases signed at £23.50 per sq ft, reflecting record rents for the tower.
Knight Frank who acted on behalf of the joint venture in 2018, has been appointed to handle the sale.
Freddie Owen, partner, capital markets, at Knight Frank said: “The office market in Leeds is at a critical supply-demand imbalance and the headline rents at The Pinnacle make the office accommodation highly reversionary, whilst remaining at a significant discount to peak rental tones in the city.
“The vendor has leased over 10,000 sq ft of space during Q2 2021, with record rents achieved three times in this period. We are excited to see what the next phase brings for this building.”
Will Lund, partner, capital markets, at Knight Frank added: “The combination of secure, long-dated, growing underlying income, coupled with the opportunity to drive value through leasing the reversionary offices is an attractive opportunity, and one which we expect to be well-received by the market.
“This is a thriving high-footfall location opposite Trinity Leeds and a short walk to the train station. The recent lettings to high-quality occupiers such as McDonald’s, Pizza Punks and Greggs, who tripled the size of their unit during 2021, have made this an exceptional location to work and shop.”
Adam Isaacs, principal at Brockton, added: “Following a significant capex enhancement programme, including a repositioning of the offices, the building has attracted leading global businesses which has further strengthened the quality of the income profile, and the asset is now primed for the next phase of growth under new ownership.”
The £62m price tag makes The Pinnacle one of the largest investment opportunities of its type in or around the city, and comes after the largest deal of the year was completed in April when another mixed used scheme, Broad Gate sold for £85m deal to Revcap.