Manchester Joint Venture in £43.75m Property Deal
A JOINT venture between Manchester companies Kier and Bruntwood has carried out a forward sale of 3 Sovereign Square in Leeds to Leeds City Council for £43.75m in what is believed to be the largest post Brexit deal in the country.
Tom Gilman, managing director of Kier Property North, said: “The significance of this major deal could not be over-estimated. It shows that, confidence remains in property as an asset class.
“The fundamentals of the commercial property market are very sound, offering significantly better yields than other investment classes, driven by attractive and secure income returns.”
The 93,851sq ft 3 Sovereign Square will be completed in September. Its main occupier is law firm Addleshaw Goddard, who have signed a 17.5 year lease at £26 per sq ft. Terms are agreed with retail and A3 operators for the ground floor and the developers are close to finalising deals to let the final office suites in the building.
Craig Burrow, director of Leeds at Bruntwood, said: “3 Sovereign Square was born in a recession and is a great example of partnership working between Bruntwood, Kier and Leeds City Council.
“Regenerating our major regional city centres is what we do as a business and the importance of this site cannot be overstated in the on-going renaissance of Leeds.
“There was strong investment market demand for the end product which, despite the national uncertainty at the moment, shows the strength of Leeds as a business destination.
“Leeds City Council have furthermore demonstrated this confidence with this long term investment in the local economy which will stand the city in good stead for the future.”
Henrie Westlake, head of the North at Knight Frank and agent for the joint venture stated “We are confident that we will continue to attract investment from across the UK and abroad.
“As the post-Brexit turbulence subsides we anticipate increased appetite for property.
“With Bond Yields at historic lows and extreme volatility in the Stock Market, property represents the most compelling option for investors.”
“During marketing we received strong interest in the development from a range of UK and overseas investors attracted by the quality of the building and the strength of the Leeds market.
“The decision to proceed with the Local Authority was based on the Council’s desire to invest in prime assets in the City in order to benefit from the success of the region.”
On the site of the old Queen’s Hall, 3 Sovereign Square provides more than 80,000 sq ft of Grade A offices and 10,000sq ft of retail and leisure space surrounded by unrivalled public open space.