Manchester’s 55 Spring Gardens on market for £15m

The 55,400 sq ft office currently achieves an annual rental income of £1.6m – a number that has the potential to grow, according to marketing materials.

Knight Frank is accepting offers of more than £15.3m on behalf of its client for 55 Spring Gardens. That price reflects a net initial yield of 10%.

Aviva Life and Pensions acquired the Spring Gardens and Fountain Street corner building in 2017 for £20.5m, according to HM Land Registry data. That is £5m more than what the group is currently seeking from the 10-storey property.

55 Spring Gardens boasts an EPC rating of B. It has multiple floors of open-plan office suites ranging between 1,000 sq ft and 7,000 sq ft. Its basement contains 18 parking spaces. Rocketing up to the building’s ninth floor, occupiers will find a “sky suite” with a 500 sq ft roof terrace.

There are only two vacancies at 55 Spring Gardens at the moment – the entirety of the sixth floor and part of the fifth. Current tenants include Clarke Willmott, Ageas Insurance, and TransPerfect Translations. The average unexpired lease term has four years before it expires and just under three years to break.

Current rent intake reflects an average office rent of £28.86/sq ft, but Knight Frank suggests that a refurbishment, enhanced amenity offering, or lease re-gears could drive that number up – noting that the building has the potential to attract rents of up to £40/sq ft.

To do this would require another refurbishment, though. The building last got its refresh in 2015, when it received a new VRF air conditioning system, remodeled reception, and improvements to its electrical services and boiler plant.

AEW Architects has drawn up a feasibility study to show how to improve the building, including its sustainability and wellness credentials. The study also showed the building’s potential to become a 113-room hotel or 59 apartments.

Knight Frank’s team for 55 Spring Gardens includes Craig Barton, Holly McLeman, Matt Stretton, and Henry Wyld.

Together, they released a statement saying: “55 Spring Gardens provides a fantastic opportunity to purchase a multi-let office in one of the best locations in Manchester’s prime central business district.

“55 Spring Gardens has a strong letting history and this has continued recently with three new lettings, and two tenants not actioning break options in the last six months.”

The group continued: “The building offers the opportunity to drive rents through leasing the remaining vacant space, completing re-gears, continued refurbishment, and enhancing the amenity provision. There is also future potential to re-position the building to alternative uses.”