Offices bought by JP Morgan in £22m deal

Toronto Square in Leeds was bought by a fund managed by JP Morgan Asset Management - Global Real Assets from M&G Investments.

M&G Investments has owned the building for four years after buying it from developer Highcross in 2013 for £29m. The latest deal is a 20 per cent drop in the price paid by M&G.

Highcross carried out a £10m redevelopment and extension programme on the 88,000 sq ft building, designed by Bowman Riley Architects, in 2010.

The office space is occupied by CBRE, Capsticks and Franklin Templeton Investments.

The building sits in a prime location on Toronto Street, surrounded by bars, restaurants, café and shops, close to Leeds Station.

JP Morgan Asset Management – Global Real Assets said it intends to undertake an investment and enhancement programme to drive the leasing of the remaining vacant accommodation.

Elliot Prosser, vice president at JP Morgan Asset Management – Global Real Assets, said: “Toronto Square fits our ongoing strategy to acquire well-located assets that are capable of being repositioned through active asset management.”

JP Morgan Asset Management was advised by Savills. M&G Investments was advised by CBRE.

More than 30 per cent of the seven storey scheme was newly built in 2010.

The major redevelopment of the former Cloth Hall Court, in the centre of the city’s legal and financial district, included the addition of two new floors and a full height extension to the rear of the original building.

However, the developer found itself at the centre of a high court battle after the owner of a neighbouring property argued the building obstructed his ‘rights of light’.

The High Court ruled that Highcross must pull down a significant part of its two storey extension, which was completed in 2009.

The parties reached an out-of-court settlement ahead of the appeal hearing in 2011.

Recent figures show that investors are flocking to spend their cash on Yorkshire property, although there are concerns that the region does not have enough ‘prime’ buildings on the market to satisfy their appetite.

Directors at some of the biggest property firms told The Yorkshire Post last month that investors from across the globe were keen to plough their money into cities like Leeds and Sheffield but warned the lack of available prime stock meant often they were forced to invest elsewhere.

According to JLL’s latest Office Market Outlook report, office investment volumes reached £158m in Leeds last year, which, while subdued as a result of available office stock, exceeded the previous year’s total.

Sheffield’s commercial property investment market for 2016 saw the highest levels of overseas investment ever recorded in the city.

The city’s office market drove record investment levels for the year, with foreign spend topping £60m and amounting to 82 per cent of turnover, with properties such as Vulcan House at the J2 Riverside Exchange and Riverside East office, home to law firm Irwin Mitchell, being snapped up.