Carlyle is lining up one of Birmingham’s largest prime office blocks for a £140m sale after a string of high-profile deals in the UK’s second city saw yields harden significantly.
The US private equity group has appointed Cushman & Wakefield and Eastdil Secured to sell the 307,000 sq ft Colmore Plaza despite it being just 60% let.
The building, which Carlyle bought unfinished and unlet in 2006 for £150m, was one of Birmingham’s most high-profile victims of the credit crunch, struggling to attract tenants when it completed in 2008.
Carlyle has previously considered approaches from investors to buy the building, but until now it has opted not to sell in the hope of filling it and securing a return on its investment.
However, with Legal & General under offer to buy 1 Colmore Square for £87m – reflecting a 4% yield – it has now decided to sell and take advantage of the depth of demand for prime stock in Birmingham.
Colmore Plaza, which comprises 12 upper floors of up to 22,000 sq ft, has seen increasing occupier demand in recent months. It now has 106,367 sq ft vacant following recent lettings to tenants including Amey and Hogan Lovells at rents of around £27.50 per sq ft.
Law firm Pinsent Masons, which is searching for 40,000
sq ft in Birmingham, has shortlisted the building alongside 55 Colmore Row and 2 Cornwall Street for its new Midlands HQ. JLL is advising on the requirement.
While it has struggled to let for several years since the crash, the paucity of new space in the city means it could still see rental growth on the remaining floors.
