Investec swoops on Manchester office block
Working with asset manager XLB, the bank’s Realis platform has acquired the 47,000 sq ft Mosley Street building for around £14m.
Investec Realis is a co-investing equity platform launched by the bank last year.
Although the price was undisclosed for the off-market deal, Place North West understands it to be around £14m, which would reflect a yield of 8.15%.
Investec Realis and XLB were advised by CBRE and Addleshaw Goddard.
Citygate is around 90% occupied, mostly by the Secretary of State and Barclays.
The building was last traded in 2011, when Hermes bought it from Aegon UK, which had marketed the asset at £8.5m. Citygate has since been refurbished, in a 2016 programme of works.
Realis and XLB said they intend to undertake a further, sustainability-led modernisation of the asset, including improving the amenities and refurbishing the common areas as it seeks to “capture the asset’s significant reversionary potential”.
Realis has now made two acquisitions, both in the regional offices market. It was launched last year in response to a period of rapid repricing in osem market segments, with the premise being that Investec will commit equity to every acquisition alongside investors.
Investec currently has a £3bn real estate loan book and a network of 150+ operating partners.
Tom Punch, real estate equity specialist at Investec, said: “Recent repricing and ongoing market dislocations has created a highly favourable entry point to acquire UK office assets with strong long-term fundamentals and significant reversionary potential.
“This transaction fits our core strategy for offices and is our first with XLB, with whom we hope to build a long-term relationship, leveraging their asset management expertise and market insights.”
XLB, which will manage the asset, also boasts within its Manchester portfolio Oxford Street’s Tootal Buildings and 35 Dale Street in the Northern Quarter.
Stephen Wormald, partner at XLB, added: “Having established a strong track record in Manchester, we are excited to partner with Investec REALIS to deliver our shared vision for Citygate. With the prime core enjoying the lion’s share of the take up and rental growth in recent years, the building is perfectly situated to benefit from these structural tailwinds.”
Barclays trades from a customer-facing ground floor set-up, with the Parliamentary & Health Service Ombudsman occupying four of the five upper floors.
