Massive Leeds office block sold in £34m deal

The home of The Yorkshire Post has been sold to a Swiss bank for more than £34m in one of the biggest city centre office deals in Leeds so far this year.

No.1 Leeds, on Whitehall Road, was sold by Triuva, an investment firm backed by German real estate investor IVG, to Credit Suisse for £34.17m.

The deal reflected a net initial yield of 6.67 per cent.

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Credit Suisse is a keen investor in the city. The bank also owns Princes Exchange, near Leeds City Station, and No.1 Park Lane.

It sold 2 City Walk, home to BSkyB and Aecom, to Kames Capital for £19.1m last year.

A property agent, who did not want to be named, said: “Credit Suisse are committed investors in Leeds. In a post-Brexit world this is a pretty good deal with good returns. Where else would you put your money?

“I expect to see increased activity in the final quarter as investors realise the end of the world hasn’t happened and it’s business as usual.”

The sale of No.1 Leeds is the second largest office deal of the year in the city.

The largest was Leeds City Council paying £43.75m for 3 Sovereign Square, a 93,851 sq ft building which will be partly occupied by law firm Addleshaw Goddard on completion.

Other deals include St Paul’s House, on St Paul’s Square, which sold for £23m in April and 20 Merrion Way, the Yorkshire Bank headquarters, which sold for £16m in March.

However, according to the latest RICS UK Commercial Property Market Survey, the Yorkshire and Humber market has seen a drop in confidence and investor demand following the Brexit vote.

During the second quarter of the year investment enquiries fell across Yorkshire and Humber with only 18 per cent chartered surveyors in the region reporting a rise in investment enquiries (down from 33 per cent in the first quarter of the year).

All sectors covered by the survey suffered a drop in investor demand including retail, industrial and offices, and foreign investor appetite declined at an even faster rate with 28 per cent more respondents to the survey seeing a drop in interest.

Richard Corby, director at Lambert Smith Hampton in Leeds, said: “The Brexit decision has slowed down decision-making and understandably caused a drop in confidence in our economy and the commercial property sector.

“This uncertainty is likely to weigh heavy on the market across the coming few months.”

The sale of No 1 Leeds, formerly Latitude Red, took six months to complete and changed hands just before the EU referendum.

The building was previously sold by its developer BAM Properties to IVG in 2007 for an undisclosed sum.

When it was first built, it remained empty for a number of years during the financial crisis before Yorkshire Post Newspapers, energy company GDF Suez and advertising agency Gratterpalm agreed leases in 2012.

The Yorkshire Post, along with a number of other Johnston Press titles, is the building’s largest tenant, occupying 40,000 sq ft.

BAM Properties secured planning permission for Latitude Yellow, a £70m office development on the same site as No.1 Leeds, at the end of last year. It also has planning permission for Latitude Blue, a 119,000 sq ft seven-storey office building.

The Leeds office of Knight Frank acted for Triuva in the No.1 Leeds deal; BNP Paribas acted for Credit Suisse.