Legal & General Capital has agreed the sale of Two Central Square, an office development in the centre of Cardiff to Credit Suisse Asset Management, for £56.5 mln (€64 mln), reflecting a net initial yield of 6.25%.
Central Square is being developed by Cardiff based developer Rightacres and funded by Legal & General.
Legal & General said that it will use the proceeds from the sale to reinvest into other similar real asset backed economic growth opportunities.
Two Central Square is due to reach practical completion in September 2018, at which point Credit Suisse will complete the transaction. The site is located at the heart of the Central Square regeneration project, which sits directly in front of Cardiff’s main transport hub, Cardiff Central Station. The property has been designed by world-leading Foster & Partners and will comprise 148,000 sq ft (13,800 m2) of offices which is targeting a BREEAM Excellent rating. The asset is fully pre-let to Cardiff University and Cardiff based law firm Hugh James.
'We made a £15 bn commitment to investing in UK infrastructure and have already invested over £12 bn to date,' said Laura Mason, director of Direct Investments, Legal & General Capital. 'As part of this, we remain committed to helping to rebuild the UK’s major regional centres and will continue to seek further significant investment opportunities in future-looking cities such as Cardiff.'
Gareth Lloyd, partner at Knight Frank, who acted for Credit Suisse, commented: 'The acquisition of Two Central Square by Credit Suisse is further evidence that Cardiff is now one of the most sought after destinations the regions for both domestic and overseas investors.'
Central Square is Wales’ largest regeneration project. Construction commenced in 2014, with the start of phase one of the Masterplan, and One Central Square was completed in March 2016. Developed speculatively it reached full occupancy within months of achieving practical completion.
Phases two and three will include a new £120 mln headquarters for BBC Cymru Wales. Work is also set to commence shortly on the development of the 265,000 sq ft plot 6, which has been fully pre-let to the Government Property Unit.
