Ask Real Estate and the Richardson family have formed a joint venture with Patrizia UK to bring forward 750,000 sq ft of offices at First Street in Manchester city centre.
Patrizia has sold a 90% stake in the remaining office development plots at the 20-acre regeneration project to Ask (45%) and Richardson (45%) for circa £25m. The offices are expected to have a gross development value of between £350m and £400m. Prior to the deal, the land was fully owned by Patrizia.
The deal represents Ask’s first investment since the Richardson family acquired Carillion’s two-thirds share in the developer for £13.8m in October. It also signals a return to First Street ownership for Ask, which created the original vision for the 20-acre mixed-use regeneration project before selling it to Patrizia in 2015, staying on as development manager.
Up to four phases of office development are planned, and will target a range of businesses with similar characteristics to those that have already committed to First Street. Secured tenants for previous office developments at the site include: Auto Trader Group, Ford Credit Europe, Jacobs Engineering, Amaze Digital and Gazprom.
The joint venture partners plan to work up designs for the buildings before starting on site in Q1 2019, subject to planning approval. The partners are considering funding options, which include securing a forward-funding partner, funding it themselves, or bringing in an additional joint venture partner.
Patrizia will continue to own and manage the leisure and retail space at First Street, as well as a residential development site with consent for a 26-storey PRS tower. Patrizia and the Greater Manchester Pension Fund are completing the construction of Number 8 First Street, a 173,600 sq ft office building that is partially prelet to Gazprom.
Completed assets also include 95,000 sq ft of leisure space let to occupiers including film, art and theatre venue HOME, Pizza Express and Sainsbury’s, along with a 700-space Q-Park car park and an outdoor events space.
The 180,000 sq ft office building No 1 First Street was sold to Standard Life Investments for £66m in 2016 and the 208-bedroom Melia Innside hotel was sold for £30m to a privately-owned UK group.
JLL advised Patrizia; Ask and Richardson were unrepresented.
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