Manchester office blocks refurbishment to boost local market
Dunedin Property, in conjunction with its joint venture partner - New York investment manager Angelo Gordon - has given the green light for the refurbishment of offices at Churchgate House and Lee House in Manchester.
Situated on Oxford Street and Great Bridgewater Street respectively, the investors have chosen UK contractor bluu to take on the multi-million pound modernisation of the two blocks, which have a combined area of 240,000 sq ft.
The properties were bought for a rumoured £23m in summer 2012 from real estate investment managers CBRE Global Investors, and are currently occupied by the Manchester Chamber of Commerce, Economic Solutions and London School of Business and Finance.
Anuj Mittal, a real estate senior professional at Angelo Gordon, Amsterdam, said: “These buildings were an exciting acquisition for us. They form an integral part of our long-term investment portfolio. Our decision to carry out extensive refurbishment reinforces our commitment to improving the offering of these landmark buildings.
“We are confident that bluu, who have an excellent reputation for producing first-class business accommodation, will use their skills and expertise to help us realise our vision for the buildings.”
CBRE have been drafted back in alongside Manchester surveyors GVA to market the new space, with both parties confident of achieving a significant rate of pre-lets in time for the official opening, scheduled for some time this spring.
Dunedin Property has turned increasingly towards office stock following the financial problems that afflicted their industrial arm as a consequence of the recession, which put 25 associated companies into administration.
The company - headquartered in London’s Mayfair with a secondary office in Edinburgh - has re-started its office investment programme of late, although the acquisition of the two blocks in Manchester is their most significant investment to date.
The supply of grade-A office space in the provincial centre has dwindled in recent months, and both local businesses and Manchester City Council are likely to be buoyed by this display of market confidence.
At present, only one commercial space - Argent's 1 St Peter's Square - is under construction in Manchester City Centre, and this is unlikely to open its doors until Q1 2014 at the earliest. This shortage has already begun to manifest itself through increased property prices in the CBD, which is likely to curtail further growth.
This was evidenced in estate agent Savills’ latest report on the office space market in Manchester, which stated: “The main story of 2013 will undoubtedly be one of steadily falling grade-A office availability in the city. We expect that the remaining space in Belvedere and Chancery Place will all be absorbed over the next six months.”
“The lack of newly-built Grade A office space in the core will put further upward pressure on prime office rents in the city, and we are projecting that these will grow by three to five per cent during 2013 and 2014.”