Pension Insurance Corporation (PIC) is investing £105m (€172m) to forward fund an office building project in North West England.

The specialist insurer of defined benefit pension funds said it has agreed to fund a new 130,000sqft “net-zero in-operation office” at First Street in Manchester, let to the Government Property Agency (GPA) for 25 years.

The asset, known as the GPA Hub, is being developed by Ask Real Estate and its joint venture partner, The Richardson Family.

James Agar, the head of long income at PIC, said the latest investment provides the specialist UK insurer with secure, long-dated and index-linked cashflows which are “perfectly aligned to serving PIC’s purpose, which is to pay the pensions of our current and future policyholders over coming decades”.

“Government let commercial property assets have been an area of specific focus for PIC and we are pleased to make this long-term commitment to supporting the modernisation of the GPA estate.

“We expect First Street to be the first development in an expanding partnership with the GPA as it looks to deliver its strategic rollout for 2025 and beyond,” Agar said.

Clive Anderson, GPA’s director of capital projects, said: “The First Street development is part of the Government Hubs Programme which will provide a smaller, better, and greener estate which supports the Government’s ambition to reach net zero carbon emissions by 2050.

“The Government Hubs Programme will also create modern, inclusive environments where departments can be collocated in shared buildings across the UK. This supports the Government’s Levelling Up agenda and Places for Growth initiative, encouraging the movement and creation of jobs outside London.”

John Hughes, managing director at Ask Real Estate, said: “We’re delighted that PIC had the commercial expertise and transactional experience to respond so effectively, within very tight timescales, to work collaboratively with both ourselves and the GPA to get this deal agreed under such volatile economic circumstances.

“This news will enable us to realise and progress our ambition to accommodate 10,000 jobs by 2028 and create a sustainable urban campus. Attracting the GPA to the estate further establishes First Street as one of the most sought-after business destinations in the region.”

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