Hermes Real Estate Investment Management has signed a deal to purchase Birmingham’s Baskerville House for £40m, representatives have confirmed.
The city centre property – comprised of 196,000 sq ft of premium multi-let office space – has been purchased from administrators Deloitte, following protracted negotiations that have lasted more than a year.
A landmark building, the offices underwent extensive refurbishment by previous owners Targetfollow Property Investment & Development in 2007, before the project was forced into administration.
Deloitte appointed Franc Warwick to assist in selling the building, which was put on offer for £55m on a 250 year lease, representing a yield of 6.86%.
Property Week reported that a private international investor had previously lodged a bid in the region of £46m, which later collapsed.
Chris Taylor, chief executive of Hermes Real Estate Investment Management, said: “The offices complement our existing portfolio of prime commercial real estate within core markets across the UK.
Taylor predicts that the future value of the space will grow substantially, as commercial property rents in London remain high and flexible working habits become more widely accepted.
He said: “[It is] an opportunity to acquire a Grade A office in the UK’s Second City at around replacement cost. The building offers a strong tenant mix and clear opportunities to add significant value.”
The deal was conducted with agent Knight Frank acting on behalf of Hermes, whilst Deloitte was represented by commercial property and real estate adviser CBRE.
In other regional property news, December 2012 saw the successful completion of Tristan Capital Partner’s purchase of Birmingham’s The Cube from administrators at PWC for £37m, representing a yield of 8.42%.
Image courtesy of Philip Halling