Member Article

Bruntwood sell Manchester’s City Tower for £132m

Bruntwood, the family-owned North West property company, has agreed a deal via Schroder Property Investment Management to sell the iconic City Tower building in Manchester for £132m. This reflects a headline initial yield of almost 7%.

Schroders are acting on behalf of three Schroder funds: Schroder UK Property Fund, Schroder Real Estate Investment Trust and Immobilien Europa Direkt.

Bruntwood’s CEO Chris Oglesby said: “At 615,000sq ft net on a 3 acre site, the building attracted a great deal of interest from parties from across the globe.

“We are delighted to have been able to identify a purchaser that paid a good price and could acquire this complex asset in a reasonably tight timescale. As important, however, was to find an organisation that will be a responsible owner of this important asset for Manchester and be a great addition to the investor base of the city.

“We look forward to working with Schroders, as we maintain the ongoing property management of the building and to continue to serve the customers at City Tower.

“The capital from the sale will be recycled, allowing us to continue to deliver our substantial development pipeline.”

Schroder’s Head of Property, Duncan Owen said: “This transaction demonstrates the effectiveness of our recent share placing, enabling us to quickly deploy capital into an accretive acquisition, whilst minimising cash drag.

“The purchase is consistent with our investment strategy of targeting assets offering good underlying fundamentals where we can add value through a variety of measures supported by a strong and convenient location.

“Bruntwood has already made significant improvements via an extensive refurbishment programme and we believe there is further opportunity to deliver rental growth for this element of the

asset in the future, underpinned by improving occupational demand. There is also the potential to generate value from asset management of the property.“

Schroders were supported on the deal by Stephenson Harwood’s legal team and Colliers. Bruntwood’s legal team were Addleshaw Goddard. The deal is due to complete by the end of the month.

This was posted in Bdaily's Members' News section by Simon Malia .