Ashtrom Properties UK has acquired Central Square in Leeds for £78m in one of the largest office investment deals in the city for more than five years.
Central Square comprises 217,249 sq ft of Grade A office accommodation across 11 upper floors, with 13,126 sq ft of retail, restaurant and leisure units located on the ground floor.
The BREEAM Outstanding building, which is located off Wellington Street and Whitehall Road, offers column-free floorplates of circa 25,000 sq ft and houses a winter garden and sky garden.
The tenant line-up at Central Square includes Marks & Spencer, PwC, Freeths, Sky, Sanderson Weatherall and BDO Services.
Guy Lewinsohn, CEO of Ashtrom Properties UK, said: “The successful acquisition of this prominent building in the heart of Leeds marks a significant step in our ongoing commitment to invest in the future of the UK’s regional city centres, which we believe are poised for strong growth.
“I would like to extend sincere appreciation to the vendor for their professionalism and collaboration throughout this process, which ensured a smooth and mutually beneficial transaction. A special thanks goes to our in-house team, whose dedication and expertise were instrumental in driving this acquisition forward. Their commitment, along with the support of our external partners, guided us to a successful outcome.”
Will Kennon, executive director at CBRE, which acted for Ashtrom Properties on the purchase alongside Knight Frank, added: “Central Square is one of the best regional office assets located outside of London. Leeds is experiencing significant growth across all metrics, and the office market is facing an acute shortage of prime office space which we believe will lead to continued strong rental growth over the next cycle.
“With the market facing continued development viability challenges, we consider this acquisition will deliver strong risk adjusted returns over both short and long term. We are delighted to have helped Ashtrom Properties UK secure this exceptional asset, to add to their strong UK office portfolio in line with its current strategy to invest in core regional cities.”
Henrie Westlake, head of the North at Knight Frank LLP, said: “The acquisition of Central Square by Ashtrom Properties UK aligns with their strategic decision to selectively invest in the UK office market. As a long term holder of assets, the strategy is driven primarily by the strong underlying market fundamentals that will drive rental growth for prime assets.
“Notwithstanding this, there is no question that a normalised market will see significant yield compression that will further validate this approach. This will almost certainly be viewed as the bellwether deal of this cycle.”
Savills represented the vendor. Hill Dickinson acted as legal adviser to Ashtrom.
