Record low for regional office yields

4 Hardman Square, the 54,300 sq. ft. office space located in the Spinningfields Business District in Manchester, has been purchased by the Investment group Orchard Street for £31m from the German real estate fund, GLL Real Estate Partners. Manchester has been touted as the place to invest in outside of London, with deals earlier in the year hitting record lows of 5.05%. However, with the acquisition of 4 Hardman Square representing a 4.9% yield, Manchester is the most attractive place to invest aside from the Capital. 

Sally Pillow, Surveyor at tenant acquisition specialist Morgan Pryce, has noted how Manchester has seen a surge in investment post-recession,

 “Manchester is on the up in terms of total investment. There are still large deals that are expected to be finalised before the end of the year; 3 Hardman Square is to be purchased for £93m at a yield of 5.5%, Norfolk House at £20m and Standard Life’s Pall Mall Court at £19m are all indications of Manchester’s attraction to all types of investors who are looking at regional markets that represent great value for money, especially when London is so competitive.”

4 Hardman square is let to HSBC and Grant Thornton, a professional services firm. Both leases have 7 years left to run, with rent averaging at £29/ sq ft for the building – approximately £3/ sq ft cheaper than headline rents in the city centre. With London rental prices hitting record highs, investors are looking towards alternative opportunities; whether they are in London suburbs or regional markets. Manchester is an increasingly attractive option and must be considered the UK’s second city for property investment. 

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.