M&G Real Estate, the West Yorkshire Pension Fund and an unnamed Asian investor have bought prime office building in Manchester for £105m (€118m).
The 165,000sqft, newly-built office at 101 Embankment was sold by an opportunity fund managed by Tristan Capital Partners.
M&G said it bought the property for its core real estate strategy in partnership with the two investors.
Martin Towns, head of capital solutions at M&G Real Estate, said: “There is an increasing trend in global real estate for large institutional and sovereign wealth investors to partner with established fund management companies through joint ventures and separate accounts.”
Simon Edwards, alternatives investment manager at West Yorkshire, said the £11.2bn pension fund was entering into a “long-term partnership”.
Tristan Capital sold the majority interest in the property held by its European Property Investors Special Opportunities 3 (EPISO 3) fund.
EPISO 3 became the principle investor in the project in 2014, teaming up with developers and co-investors Ask Real Estate and Carillion, as well as Salford City Council and Network Rail.
The building, which is let to insurance company Swinton for 10 years, was completed in the first quarter of this year. It also has 442-space car park, let to Q-Park on a separate 35-year term including guaranteed rental increases.
The project involves the delivery of a second 166,000 sqft office building, 100 Embankment, which is scheduled to start on site in the fourth quarter of 2017.
Chris Webb, director at Tristan Capital, said: “The dire shortage of grade-A offices in the centre of Manchester made this development particularly attractive.
“Salford Council’s vision and progressive approach have been integral to the successful regeneration of the city centre Embankment Estate.
“However, further work needs to be carried out; there is still insufficient space to satisfy demand in these thriving business communities, which gives us good visibility as we move into the second phase of this project.”
James Porteous, director at JLL, the agency advising Tristan on the sale, said: “This building sets a new standard in quality for offices in Manchester.
“The transaction demonstrates the growing appetite from global capital for investment opportunities in Greater Manchester.
“Approximately 76% of office transactions in 2016 were with overseas investors who are clearly attracted to the city and its current shortage of high quality accommodation.”