BT’s Leeds office sells for £38.5 million

Dale Johnstone, Partner at Allsop, said: “It is a very interesting time in the market for overseas investors wanting to access high-quality, institutional-grade stock at significant discounts to historical averages.

“Our client base is very active at the moment, with many looking for all-equity opportunities with a view to adding an element of debt at a later stage as and when borrowing rates come down.”

The 139,079 sq ft property is situated immediately adjacent to Leeds railway station. The freehold building was purpose built for BT plc and is currently let on a low rent of £19.50 per sq ft, with prime Leeds rents currently achieving £36 per sq ft.

The building, which was originally constructed in 2002, was initially brought to market earlier this year with a listed price of £48.9 million.

The building is let to BT plc, its sole tenant, for a further 12 years.

BT is the largest provider of fixed-line, broadband and mobile services in the UK, with over 82,000 employees in the UK alone.

In September of 2022, BT also announced that it would open a new flagship Sheffield office, in which it would house around 1,000 staff.

BT agreed to establish a base at the Endeavour building, based at Sheffield Digital Campus.

The latest acquisition follows Allsop’s recent expansion of its commercial investment team in the North of England with the hire of Richard Brooke, who recently joined the consultancy as partner from Cushman & Wakefield and is based in Allsop ‘s Leeds office.

CBRE acted on behalf of the vendor.

The deal comes as new figures from CBRE show that Leeds has recorded the strongest prime rental growth of any city outside London and the South East.

The city’s prime rents stand at £37 per square foot, reflecting an increase of 23 per cent since the start of the pandemic. This represents the strongest prime rental growth of the 10 city office markets analysed by CBRE outside of London and the South East.