Aviva signs £113m forward funding deal on Salford’s Two New Bailey Square

The asset management arm of insurance giant Aviva plc has agreed to forward fund the development of Salford’s Two New Bailey Square.

Aviva Investors will forward fund the 187,241 sq ft office scheme, which overlooks the River Irwell, for £113m.

Two New Bailey Square is pre-let to Salford City Council on a 25-year lease.

The 10-storey complex is part of New Bailey, the mixed-use development delivered by the English Cities Fund (ECf), a joint venture between developer Muse Developments, professional services firm Legal & General and the Government’s Homes England agency.

The deal marks the latest development milestone at New Bailey, following confirmation of an operator for the site’s second multi-storey car park.

The purchase was undertaken on behalf of the Lime Property Fund, a secure income long-lease property fund managed by Aviva Investors.

Property consultants King Street Commercial advised Aviva Investors on the transaction.

Kris McPhail, fund manager at Aviva Investors, said: “This transaction provides our investors with sustainable, inflation linked income, underpinned by a strong public sector tenant in a market with robust fundamentals.”

ECf development director Phil Mayall commented: “We selected Aviva Investors after an extensive marketing exercise and we’re delighted to be able to progress development of Two New Bailey Square and help satisfy the increasing demand for high quality, Grade A office space.

“Over recent months, development at New Bailey has gathered pace with new offices, residential apartments and a new car park all on site, helping to further establish the scheme as a focal point for business and leisure in the city.”

He continued: “Now that the Ordsall Chord is in operation, we’re seeing significantly greater volumes of people in the area and with One New Bailey close to fully let and the scheme’s first BTR development, the Slate Yard, almost fully occupied, there’s a growing sense of community that will only continue to strengthen with the addition of Two New Bailey Square.”

Salford City Mayor Paul Dennett said of the deal: “This forward funding agreement from Aviva is fantastic news for Salford. The long-term plan is when the building is fully occupied it will provide much needed business rates for our city. This money can then be added to the council’s budget and spent as a way of protecting frontline services.

“The regeneration of the New Bailey area is continuing and when complete will provide 3,000 long-term jobs, encourage the economic development of the area and new opportunities for local people.”

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