As demand for Grade A office space increases, commercial property investors are keen acquire assets in prime locations. This has seen M&G Real Estate snap up an additional property on the Spiningfields development in Manchester, with the value of the deal amounting to more than £90 million.
M&G Real Estate first ventured into the Spinningfields property market, which lies just west of the city’s Deansgate, in June 2014 when it acquired 1 Spinningfields Square. The 500,000 square feet prime office property has proven immensely popular with growing businesses and, at the time, the deal represented one of the UK’s largest ever regional office deals.
Now, M&G Real Estate has added 3 Hardman Square to its portfolio after representatives Fiona Rowley and Justin Upton managed to strike a deal worth £91.7 million with former owners Credit Suisse Asset Management. The property consists of 178,508 sq ft of Grade A office space – something which Mr Upton believes could provide strong returns for the firm as Manchester’s commercial property market continues to grow.
He says; “Business activity in Manchester is flourishing and we anticipate continued rental growth due to shortage of supply, a lack of new speculative development and demand remaining strong for prime Grade A buildings.”
The acquisition of 3 Hardman Square is the first purchase of 2015 for M&G Real Estate and a strong sign of things to come, as chief executive Alex Jeffrey confirmed the firm will continue to invest in quality stock to bulk up its portfolio. Last year, the firm bought and sold around £4 billion worth of property in key markets including the UK, Europe and Asia, bringing total transaction value for the past two years to £7.3 billion.
Mr Jeffrey says; “Over the past two years, M&G Real Estate has been one of the most active participants in the property market as our clients have allocated more capital to the sector.
“Capital inflows have been strong in 2014, allowing us to acquire more than £3.2 billion worth of assets with an average deal size of £50 million.
“We move into 2015 in a strong position with the benefit of investor and third party interest.”
Investors are increasingly keen to seek out prime properties in regional areas, as the continuing escalation of prices in London and limited supply available are pushing many out of the capital city’s market.
Manchester and Birmingham, in particular, are proving immensely popular destinations for those seeking to maximise returns, as the large number of growing and start-up businesses in each city are elevating demand for top grade stock in good locations.
