M7 Real Estate, acting on behalf of M7 Real Estate Investment Partners III (M7 REIP III), has acquired the Graeme House in Liverpool for €9.2m (£8.07m) from Downing, reflecting a Net Initial Yield of 13.5%. M7 REIP III targets regional value-add commercial real estate opportunities in the UK.
Graeme House comprises 87,002 ft² of office space and is 92% let to 22 tenants operating across a diverse range of sectors, including The Secretary of State for Communities & Local Government, Reed In Partnership, Keaney & Co Solicitors and New College Manchester Ltd. The property generates circa €1.4m (£1.2m) of passing rent per annum with a weighted average lease term of 1.9 years and presents an opportunity for active asset management.
Situated on Derby Square in Liverpool City Centre, the property is in a strong location close to the Liverpool ONE retail complex and a short walking distance from James Street railway station.
Will Hunting, Senior Acquisitions Manager for M7 Real Estate, said: “The acquisition of Graeme House demonstrates M7’s long-standing track record in purchasing assets where there is scope to create further value through our multi-let strategy. We have identified an opportunity to build on the property’s existing strong offer and to reposition the asset to accommodate a market that has seen a surge in demand for high quality, flexible and small suite office space. In addition, the property grows M7 REIP III’s high quality, diversified income stream and presents an opportunity to drive performance through active asset management.”
John Clegg, Head of Property Management at Downing, said: “Downing has been a proud custodian of Graeme House for many years and has invested heavily to upgrade this landmark building to a high standard. With the building in great condition and almost fully let, we felt the time was right to see it pass into new hands and look forward to seeing Graeme House continue to thrive under new ownership. In Liverpool, Downing will focus on the continued transformation of its No.1 Old Hall Street development into a high-quality building that befits its location and prominence in the city. The immediate next step of this process includes re-modelling and extending the reception area and creating new 5,000 ft² Grade A office space above Pret-A-Manger as part of a full internal and external refurbishment.”