A building in the heart of Liverpool’s commercial district has been put up for sale with a price tag of £34.8m as another building nearby changes hands in a £39m deal. Tony McDonough reports
One of Liverpool commercial district’s newest office buildings is up for sale with a price tag of £34.8m.
According to property news website Place North West, agents at CBRE have been instructed to find a buyer for the fully occupied No 5 St Paul’s Square, a 136,000 sq ft block that was completed in 2008.
News of the proposed sale came on the same day it was reported, also in Place North West, that the 136,000 sq ft 101 Old Hall Street, which is home to the HM Passport office, has changed hands for £39m.
No 5 St Paul’s Square is owned by Abrdn, formerly known as Edinburgh-based investor Standard Life Aberdeen. It is home to law firm DWF, which occupies 42,000 sq ft, maritime business Denholm Logistics and the Liverpool Echo. It comprises nine stories and 16,000 sq ft of ground floor retail space.
It generates an annual rental income of £2.4m and Abrdn’s asking price of £34.8m would represent a net initial yield of 6.5%. Net initial yield is the annual rental income expressed as a percentage of current capital value. Letting agent is Worthington Owen.
Abrdn also owns the nearby 107,000 sq ft No 4 St Paul’s Square which is home to a number of occupiers including law firm MSB and CBRE Liverpool. It was part of the St Paul’s Square redevelopment which was gap-funded using European Objective One cash.
On Monday it was also reported that Palm Capital had sold 101 Old Hall Street, just yards away from St Paul’s Square, to London investor Priory RE for £39m. HM Passport Office and the UK’s Visas & Immigration Department signed a 10-year extension to its lease in 2020. It occupies 84,500 sq ft, 64% of the total floor space.
The deal represents a net initial yield of 6.58%. Palm, which acquired the property in October 2018 from investment manager Warburg HIH Invest Real Estate, was advised by CBRE on the sale.
The fact that No 5 St Paul’s Square is one of the newest office buildings in the city’s commercial district illustrates the chronic state of supply of grade A office space in Liverpool. It is falling behind other regional office markets when it comes to the provision of new space.
Meanwhile, in the centre of Birkenhead, contractors have started work on two new office buildings that will cost £75m and will provide 150,000 sq ft of space. Canada Life Asset Management agreed to provide the funding for the scheme