LGIM Real Assets (Legal & General) has sold Birmingham office property ‘Priory Court & The Lewis Building’ on behalf of its second UK Property Income Fund to UAE-based Gulf Islamic Investments (“GII”) for £140 million.
The sale of Priory Court & The Lewis Building in Birmingham represents the UK’s largest office transaction outside of London this year.
This multi-let office property is strategically located in the heart of Birmingham’s Central Business District. Since acquiring the property in 2014, Legal & General has comprehensively re-positioned it by delivering a substantial refurbishment program which included the creation of an additional floor comprising 12,462 sq ft of Grade A office accommodation.
Since completing the refurbishment, Legal & General has pro-actively delivered lettings to the Ministry of Justice, Spaces, Business Growth Fund and most recently Freightliner. The top rent achieved at the property was £32.00 per sq ft and the aforementioned lettings delivered significant additional income to property and Fund.
“The sale of Priory Court & The Lewis Building marks the successful completion of the asset business plan and is testament to the skills and capabilities of our team of asset managers. During the hold period, the Fund has repositioned and re-let The Lewis Building, setting a new high rental tone, and the completion of its sale will deliver strong returns to the Fund,” said Will Edwards, Senior Fund Manager, LGIM Real Assets.
“Despite the political uncertainty, this transaction illustrates the sustained appeal of the UK property market, with Birmingham a key target for investors due to the strength of its occupational market and significant growth potential over the next 5-10 years,” said Nick Woodward, head of CBRE’s Birmingham investment team.
“Despite the challenging times and the uncertainty surrounding Brexit, GII is immensely delighted to expand its investment portfolio in the UK through another high-quality long income yielding asset for its clients endorsing our strong belief in UK real estate market. This transaction reflects well on GII’s growing expertise in acquiring such marquee assets and positions us as an active and major real estate player in the region,” said Pankaj Gupta, Co-Founder & CEO UAE, GII.