Aviva Investors has agreed to forward fund the development of Two New Bailey Square, a 187,241 sq ft (17,400 m2) office building in Salford, Greater Manchester, for £113 mln (€129 mln).
The purchase was undertaken on behalf of the Lime Property Fund.
The development, which is expected to complete by the end of 2019, is pre-let to Salford City Council on a 25-year lease subject to annual RPI-linked reviews.
Two New Bailey Square occupies a prominent position in New Bailey, a major mixed-use development delivered by the English Cities Fund in Salford. The property will be built to the highest sustainability credentials with a ‘Grade A Excellent’ BREEAM rating. The scheme will also include a basement with 50 car parking spaces and street level cycle facilities with 102 bicycle spaces.
The deal is the latest in a series of development milestones at New Bailey after it was recently announced that a second multi-storey car park, which has been pre-let by NCP, is currently under construction. Also on site is Riverside House, a Grade A office development situated directly opposite Two New Bailey Square that will deliver an additional 11,000 sq ft of space to the market.
Greater Manchester is a region of growth
Aviva Investors said that it has identified Greater Manchester as a region of major growth and it forms part of a targeted strategy to focus on fewer but stronger UK cluster locations.
Lime Property Fund is a secure income long-lease property fund managed by Aviva Investors with over £2 bn of net asset value. The fund, launched in 2004, targets property investments let to strong tenants on leases with inflation-linked or fixed-rental uplifts and lease terms of 15 years plus.
Kris McPhail, fund manager at Aviva Investors, said: 'This transaction provides our investors with sustainable, inflation-linked income, underpinned by a strong public sector tenant in a market with robust fundamentals. It is also underpinned by our strong belief within Aviva Investors about the health and future growth of the Greater Manchester area.'
The English Cities Fund is a joint venture between Muse Developments, Legal & General and Homes England in partnership with Salford City Council.
Aviva Investors was advised by King Street Commercial.
