Orchard Street Investment Management has bought Wellbar Central in Newcastle for just over £40m – setting a record low yield for the city of 6%.
The purchase from Moonglade Holdings is the largest deal in the city since 2010, when Crown Estate sold One Trinity Gardens and Stockbridge House to Standard Life for £49m.
Rents at the 118,000 sq ft office building range from £19 per sq ft to £21.50 per sq ft.
Sky UK, which operates a call centre in the 10-storey building, contributes 41% of the rental income. Other tenants include Global Radio, DAC Beachcroft and Irwin Mitchell.
Paul Griffiths, executive director at BNP Paribas Real Estate, which acted for Moonglade Holdings, said the city’s limited development pipeline should maintain the city’s rising rents.
Grade-A office space in Newcastle has diminished over the past five years, with total Grade-A supply in the city centre currently just over 100,000 sq ft, according to BNP PRE.
The deal follows a flourishing year for the North East investment market. Research by BNP PRE found that in 2015, Newcastle investment volumes hit £170m, up by 71% on 2014 and far above the five-year annual average of £57m.
Cushman & Wakefield represented Orchard Street.
louisa.clarence-smith@estatesgazette.com
