Opportunity Knocks

Investment and development opportunities are arising from
the problems encountered in fulfilling the grand plans of Birmingham City Council for regeneration.

Apart from anything else, the sheer scale of the schemes means that determined operators can find opportunities. That surely applies to Sanguine Hospitality which has moved to a third deal in the city in a short period with plans to buy the former Kennedy Tower office block at Snow Hill Plaza from Bruntwood. The deal depends on planning permission for a change of use to a 224 bedroom budget hotel.
The point about Sanguine is that it has backing from Downing Corporate Finance and Rathbones but it is also using the government’s Business Premises Renovation Allowance to ease the deal. This provides a tax break to bring derelict buildings back into use.

Sanguine’s Chairman said: “We are delighted to be involved with a third hotel scheme in Birmingham. This will be a much larger project but will again involve an international brand.” This positive view of Birmingham is backed by Henderson who has paid £26.2 million for a 12.5% shareholding in the Fort Retail Park. As a result Henderson’s UK Retail Warehouse Fund’s stake has increased to 50%. The shareholding was bought from Invista Real Estate Management. Another significant purchase is Hansteen Holdings paying £23.3 million for the 984,770 sq.metres (1.06 million sq.ft.) 22 Unit Saltley Business Park from LPA Receivers acting for Lloyds Banking Group. At the moment eight of the units on the park are empty.

Perhaps the most important guide to the future of investment in Birmingham comes from Dr Karl-Joseph Hermanns-Engel of Union Investment who believes that the main regional cities in the UK provide the opportunity to diversify the fund managers’ UK portfolio “without compromising on building
quality, tenant strengths and lease lengths.”