BT’s UK headquarters at 1 Sovereign Street in Leeds has been bought by clients of Citigroup for £38.5m.
Citi Private Bank’s deal for the 140,000 sq ft Leeds landmark, next to the city’s railway station, equates to a net initial yield of 7%.
The freehold building is let to BT for a further 12 years at £19.50 per sq ft, well below the prime Leeds rent of £36 per sq ft.
RPI-linked rent reviews are due in 2025 and 2030, while potential refurbishment presents another opportunity to drive rental growth.
Allsop acted for Citi; CBRE acted for the vendor.
Allsop partner Dale Johnstone 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.”
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