M&G investor trio buys £105m Manchester offices

By Paul Norman - Monday, July 17, 2017 17:00

M&G Real Estate with the West Yorkshire Pension Fund and a private Asian investor client have joined forces to buy 101 Embankment in Manchester from Tristan Capital Partners and Ask Real Estate for £105m, CoStar News can reveal.

The acquisition of the 165,000 sq ft office in central Manchester equates to a net initial yield of in excess of 5.3% and is a three party joint venture made on behalf of M&G's Capital Solutions business headed by Martin Towns.

Swinton Insurance signed a lease agreement for all 165,000 sq ft of the first Grade A offices at Ask Real Estate, Carillion and Tristan Capital Partners' Embankment - 101 Embankment - in October of last year in what was the largest property letting deal in Manchester city centre in recent years.

The purchase of 101 Embankment, which is located at the heart of the Cathedral District in central Manchester, has been made on behalf of M&G Real Estate’s UK core commercial property strategy in partnership with an Asian investor and West Yorkshire Pension Fund, one of the UK’s largest pension funds.

101 Embankment is the new head office of insurance firm Swinton, which has been let on a 10-year term. The high specification premises include a 442 space car park, let to Q-Park on a separate 35-year term. The leases include guaranteed rental increases.

Martin Towns, Head of Capital Solutions, M&G Real Estate, said: “There is an increasing trend in global real estate for large institutional and sovereign wealth investors to partner with established fund management companies through joint ventures and separate accounts. We believe in investing time to truly understand our clients’ unique preferences and requirements, using our skills and experience to create bespoke strategies and investment opportunities that work for them.

“We are delighted to be working with West Yorkshire Pension Fund and a leading Asian investor to help them meet their real estate investment objectives, whilst also enabling our UK core commercial property strategy to access a highly attractive asset."

Simon Edwards, Alternatives Investment Manager of West Yorkshire Pension Fund, added: “We are very happy to be entering into this long term partnership. Thanks to M&G Real Estate’s expertise in sourcing and structuring this deal, we stand to benefit from stable returns from a high quality asset and meet the strategic objectives of our Fund."

Embankment is a two-phased Grade A office development being delivered in partnership with Salford City Council and Network Rail. Planning consent for the second phase of the scheme, 100 Embankment, was granted in July of last year.

Embankment is located on the Salford bank of the River Irwell at the point at which the two cities meet.

The 442-space Q-Park car park will lie underneath the two Embankment office buildings.

CoStar News revealed in July of last year that Swinton was in talks to take the entire building after significantly increasing its requirement.

101 Embankment, a joint venture between Ask Real Estate, Tristan Capital Partners and Carillion, was brought forward by Salford council, which guaranteed rental income in case the development failed to let.

More than 1,000 employees will relocate to Embankment from existing city centre sites on Whitworth Street and Great Marlborough Street.

CBRE advised M&G and its investment partners. JLL advised Ask and Tristan on the sale.


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