A key investment sale, of One Piccadilly Gardens, would set a new benchmark for Manchester if Europa CapitaI goes ahead with the suggested purchase from Irish investors.
The 13,935 sq.metres (150,000 sq.ft.) mixed use complex is one of the properties expanding the boundaries of the business district. The price would give it a yield of 6%, which is a top rate for the city.
It is well over a year since the last significant investment deal when Luxembourg based Aerium bought 3 Hardman Street, Spinningfields for £180 million and a yield of 6.25%. One Piccadilly Gardens is the type of prime, well let, property that will appeal to foreign investors.
Even so, the price is no improvement on what it sold for six years ago. Peter Skelton of Lambert Smith Hampton said of the current market for investments that: “We have crossed the threshold of investment buying as it moves out of the south east.”
As far as the letting market is concerned, he said that there have been an encouraging number of smaller transactions. He added that some substantial new developments were “on the cards.”
According to Knight Frank’s ROMP survey, the office vacancy rate in Manchester is 15% For comparison, it is 12.4% in Birmingham, 10.9% in Bristol and 11.4% in Leeds.
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