Helical Bar today announces that, in an off market transaction, it has exchanged on the acquisition of Churchgate House and Lee House, two interlinked office buildings for a net consideration of £34 million (approx. €40.97 million) from a joint venture between Angelo Gordon and Dunedin Property. The purchase price reflects a net initial yield of 5.7%. The transaction will be funded through a combination of cash and existing undrawn debt facilities.
Grade II listed Churchgate House and Lee House are located on Oxford Street, part of Manchester’s central business area and provide circa 250,000 ft² (approx. 23,225 m²) of multi-let office accommodation, at rents between £14.00 and £17.50/ft². A number of tenants extended their leases over the last 18 months, however, there is currently circa 35% vacant providing Helical with opportunities to improve income through letting up space.
Duncan Walker, Investment Director at Helical Bar, commented:
“This is an exciting acquisition for Helical. Following the recently announced sale of Battersea Studios, we are very pleased to be able to quickly recycle the capital into a property where we see opportunity for good cash flow and capital growth.
“Churchgate and Lee House represents a high quality, well located multi-let asset in a market that is starting to show the early signs of improving occupational demand underpinned by economic growth across the UK.
“We believe this asset lends itself well to the Helical model and track record of successfully repositioning and improving assets through intensive management. As such, through improvement of vacant floors and the continued refurbishment of the common parts, we will be able to offer quality accommodation at affordable rental levels that we hope will enable us to secure new lettings in the near term.”
Anuj Mittal, Managing Director at Angelo, Gordon, commented:
“We are delighted to see Churchgate and Lee House pass into good hands. Together with our joint venture partner, Dunedin Property, we were early believers in Manchester’s potential and now that the recovery is well underway we will be looking for other opportunities in the city for us to add value to other buildings requiring an innovative asset management approach.”
Source: FTI Consulting