Expanding pan-European fund manager Europa Capital is in talks to buy a major mixed-use building in Manchester.
The group is understood to have bid as much as £70m to buy the circa 150,000 sq ft One Piccadilly Gardens (pictured) from a consortium of Irish investors.
The sale price would reflect a yield of 6% – a prime yield for the city – and would be central Manchester’s first significant investment transaction this year, following the collapse of a £48.5m sale of Piccadilly Gate to German bank HIH Global Invest in November 2010.
The last major office investment in the city was Luxembourg-based Aerium’s purchase of 3 Hardman Street in Spinningfields from Allied London for £180m – a 6.25% yield – in early 2010.
The deal would also provide an extra fillip for Manchester, where agents have raised concerns that a lack of pressure on funds to buy could lead to a quiet investment year.
However, Europa, which is one of the few European fund managers that escaped the global downturn relatively unscathed, is in expansion mode. It retreated from the market in 2007 and started a selective acquisition trail in 2009. Investments included Fremlin Walk shopping centre in Maidstone, Kent, bought from Land Securities, which it sold a year later at a £25m premium.
Earlier this week, Europa announced it had promoted eight staff to partner level as part of its expansion plans.
One Piccadilly Gardens was developed by Argent in 2003 and sold two years later to the Irish consortium for £70m. The property, close to Piccadilly railway station, is let to tenants including Bank of New York Mellon and King Sturge.
daniel.cunningham@estatesgazette.com
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