Pitalia swoops for Aeroworks in debut buy

The property fund set up by former JLL director David Lathwood in March has acquired the 35,000 sq ft former aircraft factory in Manchester for £9.3m.

Pitalia Real Estate, which is backed by Bolton-based businessman Anil Pitalia, bought Aeroworks in an off-market deal from privately owned propco Epsilon. It is the fund’s first deal since its launch and represents an initial yield of 5.25%, Pitalia said.

The building on Adair Street in Ancoats was redesigned by former architecture firm Stephenson Bell and houses FTSE 250 online travel booker On the Beach. The London Stock Exchange-listed company became the sole occupier in 2018 on a 10-year lease.

Epsilon undertook a full refurbishment after purchasing the building in Manchester’s Portugal Street East regeneration zone in 2015. The refurb included the creation of workspace including a 250-seat auditorium, ‘beach bar’ and library.

Pitalia was set up in March under the Pitalia group of companies, with Lathwood as managing director and chief executive and Pitalia listed as a director. The businessman founded SpaMedica, one of the NHS’s largest cataract surgery contractors, in 2008 and sold the business first to CBPE Capital in 2016 and then to Nordic Capital for £300m last year.

It aims to target investments in “mid-to-large” assets across a range of property sectors including build-to-rent, industrial, offices and retail, with a focus on best in class” sustainable buildings, Lathwood said in March.

The founders have declined to disclose the fund’s size and value.

“Aeroworks is a fantastic asset that’s located in a part of the city centre we expect to thrive post-lockdown,” Lathwood said. “The dynamics in Ancoats, with its large population of young professionals, renowned independent food scene and night time economy and proximity to major transport hubs are hard to beat.”

He added: “As our first purchase, Aeroworks ticks all our boxes. It’s in a location that is very likely to get better in the coming years and the building offers space that we believe fits contemporary occupiers’ needs.

“We believe the current rent is highly reversionary and as our first foray into the market, we are thrilled to have purchased the building off market.”

Pitalia Real Estate was represented in the deal by Colliers International, while Epsilon unrepresented.