Peel L&P has put its 182,092 sq ft Harbour City office scheme in Salford Quays up for sale with a price tag of £40.30m. The price reflects a net initial yield of 10%.
The Grade A office scheme comprises two buildings – The Alex and The Vic – and an adjoining multi-storey car park set in a prominent waterfront position.
The Vic offers 123,148 sq ft of space over the basement, ground and eight upper floors. The building recently benefitted from a £9m refurbishment. Peel said through additional renovation works there was an opportunity to further enhance the asset and drive the rental tone towards £25/sq ft from its current base of £17/sq ft. The Alex is a landmark five-storey office building offering 58,944 sq ft of Grade A space.
Mike Pochin, director, CBRE investment properties, which has been appointed to market the scheme, said: “This is an exciting opportunity to acquire one of Greater Manchester’s most successful office buildings over the past two years and access material capital growth via rental growth and yield compression as the asset reaches full stabilisation. The blue chip occupier line up of recently committed tenants is testament to the high quality of the asset and the Salford Quays location. The rental tone offers significant day one reversion, with further rental growth achievable via rolling refurbishment.
“Salford Quays is a vibrant and successful submarket that consistently outperforms established regional city centre markets in Liverpool, Sheffield and Newcastle. As an office market, it is increasingly under-supplied, with many older buildings repurposed for residential use, and new build development is challenging against a backdrop of build cost inflation, increased financing costs and higher cap rates. Harbour City is, therefore, exceptionally well positioned to be market leading throughout the next cycle.”
A spokesperson for Peel L&P added: “A recent £9m investment into The Vic and Alex has transformed them into prime, grade A office space verified as net zero carbon in operation, attracting a raft of high-profile occupiers including the RAC, M&S and The Department of Work and Pensions. The sale of these buildings presents a fantastic opportunity for an investor and will enable us to support future investment into regeneration projects, creating further jobs and opportunities.”
