M&G Real Estate is understood to be under offer to buy the Three Snowhill office development in Birmingham.
Ballymore is thought to have struck a deal for M&G to forward fund the construction of the 400,000 sq ft third phase of the Snowhill development. Ballymore and M&G are expected to jointly develop the scheme – one of the largest office developments outside London.
Savills was appointed in April to find a buyer for the scheme. The deal is believed to be worth circa £150m.
Ballymore had also been in talks with Union Investment Real Estate about funding Three Snowhill. However, sources said that while M&G would consider speculatively funding the development, Union would have preferred a prelet to have been in place.
No prelets have yet been secured, although talks with potential, as yet unnamed, occupiers have been taking place. HS2 is said to be considering taking further expansion space within Three Snowhill when required. It let 100,000 sq ft in Two Snowhill last year.
If the deal with M&G completes, it will bolster M&G’s assets in the area. Last September, M&G acquired the neighbouring Two Snowhill office block for £146m and earlier this year it paid £9m in a strategic acquisition for the Royal Angus multi-storey car park, which is bounded by M&G’s Lumina site and the Three Snowhill site.
Revised plans for Three Snowhill were given the green light last Thursday by Birmingham council planners. The plans include a 16-storey tower, comprising 360,000 sq ft of offices alongside 40,000 sq ft of leisure and retail.
The long-awaited scheme had been mothballed because of the recession, but now forms a key part of the wider Snow Hill masterplan for the area.
Original plans for the third phase comprised a 43-storey residential tower and a 23-storey tower housing Birmingham’s first five-star hotel.
Three Snowhill is the final piece in the jigsaw of the 1m sq ft Snowhill development and would provide much-needed grade A office space in the city centre.
All parties were unavailable for comment.
BNP Paribas Real Estate is said to be advising M&G Real Estate.
