Record £125m deal for India Buildings pushes North West Q1 investments close to £1bn

Lambert Smith Hampton’s latest UK Investment Transactions report says investment volumes of £965m in the first quarter of 2018 were more than double those during the same period in 2017. Tony McDonough reports

India Buildings
India Buildings in Liverpool city centre changed hands in a record £125m deal

 

Property investment volumes in the North West in the first quarter of 2018 totalled not far off £1bn – with the record £125m sale of Liverpool’s India Buildings a major contributor.

Lambert Smith Hampton’s latest UK Investment Transactions (UKIT) report says investment volumes of £965m in January, February and March were more than double those during the same period in 2017 when they came in at £440m.

Office transactions accounted for 41% of the total with the purchase of India Buildings by L&G’s LPPI Income Property Fund, the largest deal for an office building in Liverpool’s history, accounting for a hefty chunk.

The deal was a profitable one for the vendor, Shelborn Asset Management, which purchased the Water Street site January 2016 from Green Property for just £16m.

A major refurbishment is now under way following a 270,000 sq ft letting to HMRC which will relocate around 3,500 across 10 floors of the building from 2019.

The UKIT says that deal highlighted the continued appetite from UK institutions and overseas investors for secure, long-let investments with HMRC agreeing to a 25-year lease.

The first quarter of 2018 has also been one of the strongest quarters for the alternative investment market. The most significant assets to change hands were the Manchester Arena which Mansford disposed of for £102m and Invesco’s forward-funding deal of 383 Build to Rent units in Liverpool, at £86m.

Ben Roberts, director of capital markets for Lambert Smith Hampton in the North West said: “The North West has performed very strongly, particularly when compared with the national data and we’re continuing to see a broad range of investors keen to invest into the region.

“The Q1 volumes are surprising given the recognised lack of stock and it is positive to see the North West having such a stellar start to the year. 

“However, with squeezed stock levels and downward pressure on yields, stock selection is becoming even more important. Most interestingly, the alternatives sector has attracted significant investment so far this year and this is set to continue.”

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