The two interlinked Manchester offices offer a total of 250,000 sq ft of M1 office space, of which 35% is vacant.
Churchgate House and Lee House in central Manchester have been acquired by a Helical Bar led joint venture for £34m. Helical is working in partnership with Angelo Gordon of the USA and Dunedin Property, the UK asset management specialist. Together they have identified the potential for maximising the rental income by attracting new tenants and restructuring the leases with existing occupiers. The investment is composed of two interlinked Manchester offices that are prominently located near Oxford St and alongside the Rochdale Canal. Churchgate and Lee Houses offer a total of 250,000 sq ft of M1 office space, of which 35% is vacant. Churchgate House is the more striking of the two buildings and features an ornate facade built in red brick and orange terracotta materials. The Grade II listed building was built for the textiles company Tootal Broadhurst Lee Co. Ltd. between 1896 and 1898. By contrast, as a former warehouse, Lee House has a more modest appearance and offers large floor plates of up to 13,500 sq ft. The overall floor space has been let to multiple tenants at rents that range from £14 to £17.50 / sq ft. As a result, the sale price provides the investors with a 5.7% net initial yield.
The £34m deal will be partly funded through cash from the partners and existing loans. Duncan Walker, the Helical Bar investment director responsible for the project, said: “We believe this asset lends itself well to the Helical model and track record of successfully repositioning and improving assets through intensive management. As such, through improvement of vacant floors and the continued refurbishment of the common parts, we will be able to offer quality accommodation at affordable rental levels that we hope will enable us to secure new lettings in the near term.” Helical Bar plc is listed on the London Stock Exchange and has an extensive UK portfolio as well as assets in Poland.