F&C Commercial Property Trust Limited (“FCPT”), which is managed by BMO Global Asset Management’s specialist real estate investment manager, BMO Real Estate Partners, has acquired One Cathedral Square, a prime office asset in the centre of Bristol, for €38.06m (£33.5m). The property was acquired from Castleforge Partners and the purchase price represents a yield of 5.0%.
One Cathedral Square is a Grade A office building totalling 56,059 ft² over four floors, in addition to a basement level which offers underground car parking and bike storage. Originally constructed in 1987, the property, which underwent a comprehensive refurbishment of both the interior and exterior in September 2017, delivers an attractive high specification office asset which features an impressive atrium spanning the full height of the building, roof terraces and shower facilities. The asset has been acquired fully let to the strong covenants of the University of Bristol and Dyson Technology on a WAULT of 12.4 years to expiry and 7.6 years to break, generating rental income of €2m (£1,78m) per annum.
One Cathedral Square benefits from a prime location on Trinity Street, situated between Bristol’s historic College Green and the mixed-use Harbourside area that is recognised as the city’s key business district and centre for the financial services sector. The property is well connected to major national road routes while Temple Meads railway station is less than one mile away and Bristol Airport is also within easy reach.
Commenting on the purchase, Fund Manager Richard Kirby said: “This acquisition complements the portfolio’s existing holdings and provides secure income that is backed by solid financial covenants, while also delivering an attractive yield. With current supplies of Grade A office space in Bristol at an all-time low and the increasing appeal of the city to a broad range of commercial occupiers, we have confidence in the fundamentals supporting our ability to deliver both capital and income growth on behalf of our shareholders from this investment.”
FCPT was advised by CBRE on this transaction, while the vendor was advised by Colliers.
