by Edward Simpkins
German fund CGI has offered to forward purchase MEPC’s redevelopment of Lloyds Bank’s Birmingham property interests for £55m.
David Parkinson at MEPC said the 13,000m2 (140,000 sq ft) redevelopment of 125 Colmore Row was still subject to funding, but added: “I cannot deny that CGI has made an unsolicited approach.” MEPC hopes to get planning permission in April and start work soon after.
Lloyds is expected to take occupation of the new building early in 2000 at close to £269 per m2 (£25 per sq ft). The £55m offer represents a projected yield of 6.75%.
Best evidence for local rent levels is last year’s prelet of 7,153m2 (77,000 sq ft) at 115 Colmore Row to law firm Eversheds at £247 per m2 (£23 per sq ft).
Parkinson said: “We are contracted to provide a new regional HQ building on Colmore Row.”
For the next three years Lloyds will move into just under half of TSB’s 13,935m2 (150,000 sq ft) Victoria Square House, New Street, the remainder of which is available through Chesterton and Richard Ellis.
In 1995, Lloyds prelet Argent’s 6,967m2 (75,000 sq ft) Two Brindleyplace and has also taken space in Bristol following its merger with TSB.
Richard Ellis is advising MEPC on the scheme, while DTZ is acting for CGI.
MEPC has had a continuous relationship with CGI since 1996 when it sold its entire European portfolio to the fund for around £185m.
A Birmingham deal would not be CGI’s first outside London: last April it spent £47.5m on the Atlantic Quay offices at Broomielaw, Glasgow, and it bought a shopping centre in Ashton under Lyne.
Despa also made a second purchase outside London this week (see light). But some German funds are selling: see DGI story, p39.
