Landmark city centre building sold for £5.1m
Ilkley-based private investment group Glentrool Estates has disposed of its freehold interest in the multi-let office building at 14 South Parade, in Leeds.
The 26,000 sq ft building was acquired by the Welbeck Estates Company, represented by Edwin Thompson,
The deal provides further evidence that the Yorkshire office market is set for a revival in 2013, despite the threat of a triple dip recession and the ongoing uncertainty in the eurozone.
The city centre office is let to occupiers including Forbes Solicitors, Northern Rail, Thorn Baker and Venn Group.
Garry Howes, the investment partner at Gerald Eve, who advised on the sale, said: “This transaction demonstrates that there is still appetite for well-let regional office buildings in the right location.
“With a strong occupational market in the financial and professional services sectors, we anticipate similar deals will come to the fore during 2013.”
Last night, Mr Howes told the Yorkshire Post he had received “strong interest” in the building from a number of parties.
Jeremy Nolan, a spokesman for Glentrool, added: “We are delighted with the performance of this asset and we are actively seeking other assets.”
Originally developed by Friends Provident in the 1930s, 14 South Parade has been refurbished to provide modern accommodation, flexible floor-plates and amenities such as passenger lifts and shower facilities.
A spokesman for Gerald Eve said the deal signalled a return to investment activity in Leeds, after a relatively quiet period.
The spokesman added: “The deal was done at a good price and achieved a very good yield, which means that the purchaser is confident enough in the asset to believe that it will recoup the investment.
“Although regional offices have been widely regarded as a beleaguered sector, the fact that a national investment company has made an acquisition of this scale shows there is faith in Leeds, particularly given that the same purchaser bought Fountain House.”
Fountain House, which is also based on South Parade, is a 1930s-style art deco building.
The spokesman for Gerald Eve added: “This (deal) is backed up with the relative strength of the occupational market in Leeds, which underpins the investment market and which may encourage further activity.
“Since the peak of the market in 2007, Leeds has experienced the lowest fall in headline rents of all the major regional cities.”
The spokesman said Glentrool had bought 14 South Parade in 2006 from Threadneedle.
Data published recently suggests that the Leeds office market could be about to undergo a revival.
Earlier this month, a study compiled by the Leeds Office Agents’ Forum showed that 2012 occupier take-up in Leeds city centre totalled 405,951 sq ft, the largest leasing volume for four years.
Office take-up in Leeds city centre during 2011 totalled 398,159 sq ft.
Richard Dunn, a partner at Sanderson Weatherall and spokesman for the Leeds Office Agents’ Forum, said: “Leasing volumes remained steady in the fourth quarter but, on the whole, the total annual figures show that the office market has remained robust, especially given the economic outlook. The bounce back in city centre take-up, which reached the highest level seen for the last four years, is particularly encouraging and shows that, while there is a degree of occupier caution, we are seeing improving sentiment. Like other regional markets, occupier activity in the office sector continues to be driven by smaller transactions, and in the Leeds market there were no deals over 10,000 sq ft recorded in the final quarter of 2012.
“However, looking ahead, we anticipate there will be an increase in larger sized deals in the first three months of this year, which will help to get 2013 off to a strong start.”
The Leeds Office Agents’ Forum was established to collate and distribute definitive market information. Its members include BNP Paribas, Carter Towler, CBRE, Colliers International, DTZ, GVA, Jones Lang LaSalle, Knight Frank, Lambert Smith Hampton, Ryden, Sanderson Weatherall, Savills and WSB.
A showcase for Leeds
Leeds’ potential for property investors will be highlighted when Leeds and Partners leads a delegation to the MIPIM property conference later this year.
Leeds and Partners and its private sector supporters will use MIPIM, which is being held in Cannes from March 12 to 25, to position Leeds as a place to do business.
Leeds and Partners chief executive Lurene Joseph said: “The Leeds City Region has a compelling offer to investors and the delegation to MIPIM has unrivalled backing from the private sector to demonstrate that.
“We have major international firms lined up who are already at the forefront of great developments in the city and wider region. This is the week we will be letting property investors and experts from around the world know why so much investment is going into the Leeds City Region.”