Global real estate investor M&G Real Estate has acquired a prime office in central Manchester for £105 mln (€119 mln) in joint venture with an unspecified Asian investor and the West Yorkshire Pension fund.
The 165,000 ft2 (15,300 m2) newly built office, dubbed 101 Embankment, was purchased at a net initial yield in excess of 5.3%. The acquisition is a three party joint venture made on behalf of M&G's Capital Solutions business led by Martin Towns.
'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,' said Towns.
'We are delighted to be working with West Yorkshire Pension Fund and a leading Asian investor to help them meet their real estate investment objectives, whilst also enabling our UK core commercial property strategy to access a highly attractive asset.'
The asset is the new head office of insurance firm Swinton, which has been let on a 10-year term. The premises include a 442 space car park, let to Q-Park on a separate 35-year term. The leases include guaranteed rental increases.
'We are very happy to be entering into this long term partnership. Thanks to M&G Real Estate’s expertise in sourcing and structuring this deal, we stand to benefit from stable returns from a high quality asset and meet the strategic objectives of our fund,' said Simon Edwards, alternatives investment manager of West Yorkshire Pension Fund.
