Skanska sells Bristol project to Aviva for €46m

Skanska has exchanged contracts to sell a prime, city-centre office development in Bristol to Aviva Investors Property Trust for £32.7 mln (€46 mln).

The commercial development at 66 Queen Square is part new-build and part restoration of a Georgian terrace building, offering 5,700 m2 of space in total. It was put on the market for an asking price of £30 mln.

Construction work on the project has started and is due to complete in September 2015.

The scheme is 90% pre-let at present, at a headline rent of £28.50 per sq ft. KPMG has agreed a 15-year term and Handelsbanken has agreed a 10-year term, both without tenant breaks.

'We started this speculative development in 2013, confident that the timing was right for the Bristol office market, and we have been proven correct,' said Andreas Lindelöf, managing director development, Skanska UK.

The developer is 'close to letting the remaining space', added Lindelöf. 'We are excited about reinvesting the proceeds of the sale into our target markets of Bristol and London, and continuing to develop market-leading, sustainable office buildings.'

JLL and Alder King advised Skanska on the sale of the investment. Knight Frank and Tuffin Ferraby Taylor (TFT) advised Aviva Investors. Alder King and JLL are also letting agents for the development.

The 66 Queen Square deal follows Skanska’s divestment of its own Bentley Works in Doncaster in 2014, to the Skanska UK pension scheme.

The Swedish construction and property giant is also developing The Monument Building in the City of London, which is due for completion in the spring of 2016.