Alpha Real Capital has acquired Bristol’s Temple Quay House from M&G Real Estate for £73.3m.
The purchase price represents a 4.02% net initial yield and 5.04% reversionary yield.
It was put on market at £60m earlier this year. The transaction was 100% equity funded and completed in just 12 days.
The office has a total floor area of 85,000 sq ft and is let to the secretary of state, communities and local government on an 18-year lease at c.£22 per sq ft.
The government has occupied the building since 2001. It recently extended the lease to 2037 and is due to spend £15m on upgrades to the building.
It has a fixed 16% rental increase in 2026 and an open market review in 2031.
Phillip Rose, chief executive, Alpha Real Capital said: “The length of the UK government’s lease, approaching two decades, the strength of the government’s commitment to the building together with the significant under-renting of the building and 5% reversionary yield strongly underpin the property’s income security.”
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