City centre offices acquired for £12.6m

A six-floor multi-let office building in central Leeds has been acquired for £12.6m.

76 Wellington Street has been bought from investment manager Ardstone Capital by Hillview Real Estate, a UK regional office investor, and Sh.i.r. Shlomo Real Estate, a subsidiary of one of the largest conglomerates in Israel. Hillview is investing through its £300m Hillview Partners Property Fund III.

The building comprises 35,951 sq ft of office space. Hillview plans to upgrade the building, ensuring it meets the needs of modern office occupiers and sustainability.

This upgrade will include extending and refurbishing the reception, using the basement for extensive cycle storage and changing facilities, and upgrading the building plant to modern energy efficient systems.

The building which is located in the heart of Leeds’ burgeoning financial district was acquired by Ardstone in 2014 and is let to a range of high calibre tenants including Schofield Sweeney LLP, Home Group and Aldermore Bank with a weighted average lease term of four years.

Michael Cecil, head of asset management at Ardstone, said: “We have repositioned the building during our ownership and are pleased to be passing on the asset to Hillview with a strong line-up of tenants. With the business plan now completed we have decided to sell in order to concentrate on further projects in Edinburgh and Bristol”.

Luke Symonds, partner at NorthCap, which advised Ardstone on the sale added: “The successful disposal of 76 Wellington Street ahead of the asking price demonstrates that despite recent headwinds, well-specified, core office stock remains in demand.  Ardstone’s dynamic approach to asset management is reflected in the pricing achieved at sale and we look forward to seeing how the purchaser takes this property forward as occupiers return to the workplace.”

76 Wellington Street is the first acquisition for a new partnership between Hillview and Sh.i.r.  Shlomo Real Estate, to establish a portfolio of regional office properties in the UK.

It will leverage Hillview’s origination network across the regional cities to acquire well-located, multi-tenanted, institutional-quality properties in key cities and regions with favourable supply-demand dynamics.

Sh.i.r. Shlomo Real Estate Ltd, a company traded on the Tel Aviv Stock Exchange, has been investing since 2011 both in Israel and in Europe, mainly in offices, hotels, and industrial properties.

It is a part of the Shlomo Group, an Israeli investment group employing more than 5,000 people with a number of operational divisions in the transport, insurance, finance, infrastructure, construction, shipping, logistics and real estate sectors.

The group operates in Israel, Romania and Germany, generating annual revenue of around €2bn.

Hillview Real Estate and Sh.i.r. Shlomo Real Estate were advised by CBRE and Ardstone Capital was advised by NorthCap.

Nadav Livni, managing director of Hillview Group and fund manager of Hillview Real Estate, said: “This is a fantastic value-add acquisition for our fund and our new partnership with Sh.i.r. Shlomo Real Estate.

“The building is very well located in the heart of Leeds’ financial district, it is under-rented and provides identified opportunities for our team to significantly add value by modernising the space, adding amenities for tenants, and improving its sustainability rating.”

Israel Raif, CEO of Sh.i.r. Shlomo Real Estate, added: “We see the compelling opportunity to invest in properties that need repositioning, by focusing on the ESG criteria of sustainability, efficiency, amenities, digital connectivity, end-of-journey facilities and wellness.”