Standard Life is in advanced talks with construction firm Interserve to forward purchase its new headquarters.
Interserve instructed Colliers International to market the 115,000 sq ft development in Solihull, West Midlands, in August for £53m, which reflects a 5% yield.
The deal shows the sustained desire for prime regional assets among institutional investors that have been largely squeezed out of London.
When the building is completed, it will be fully let by the new owner to Interserve on a 25-year lease. The company will pay an annual rent of £2.7m or £23.50 per sq ft.
Contractors, which generally survive on profit margins of less than 2%, have been increasingly lured towards development in recent years as a means of accessing greater profits, with some including Interserve utilising their own covenants to do so.
The project is expected to start on site at the beginning of 2016, with a scheduled completion towards the end of 2017.
Interserve’s existing offices are located in Erdington, Aldridge, Dudley, Redditch and West Bromwich.
