Ashby Capital has bought Colmore Plaza in Birmingham city centre from Carlyle for close to the £140m mark, after battling with US funds and UK institutional investors to secure the trophy office block, in a deal first tipped by CoStar News.
The deal is the largest office sale in Birmingham so far this year and further evidence of capital continuing to flow into the Midlands city.
CoStar News understands that Peter Ferrari’s Ashby edged out rival bidders thought to include Northwood Investors, Ares and M&G in the race to buy the 310,000 sq ft office building, in what is one of the largest regional deals of the year.
According to market sources Ares and Northwood had made significant enquiries to acquire the office block off-market, with both prominent throughout the bidding process.
Carlyle, the US private equity group, instructed Cushman & Wakefield and Eastdil Secured to seek offers in the region of £140m for the trophy office, as the fund looked to capitalise on the relative dearth of available prime assets.
Carlyle decided the time was right to sell having just secured architectural practice AHR for a five-year lease renewal while a professional services firm is under offer on 8,000 sq ft within the building.
Ashby Capital is a London-based investment advisory firm founded by former Heron International managing director Peter Ferrari and backed by private investors.
Peter Ferrari, Chief Executive of Ashby Capital, said: “The limited supply of Grade A office buildings in Birmingham, the improving transport links through HS2 and the expansion of companies such as Deutsche Bank and HSBC in the city mean prospects for high quality buildings such as Colmore Plaza are very promising. As the major regional cities such as Birmingham and Manchester continue their strong recovery, we continue to be interested in opportunities in prime, central locations in these markets.”
The unfinished development was acquired by Carlyle in 2006 from Abstract Land for £150m, with the building initially struggling to attract tenants due to the recession.
However, more recently there has been a spate of high profile lettings in the building. Vodafone signed a 10-year lease for 23,000 sq ft on the 9thfloor at the end of last year, and this year Carlyle has secured Hogan Lovells and Amey.
Nicky Barker, associate director at The Carlyle Group, said: “Having secured a number of new leases at Colmore Plaza, we are delighted to complete this sale to AshbyCapital in what is one of the largest regional deals of the year so far.”
Birmingham is running out of Grade A office stock, particularly for larger floorplates, pushing up demand on a limited pool of prime assets.
L&G has recently acquired 1 Colmore Square for £87.3m and Mitchells & Butlers’ HQ for £69.5m, with both initial yields hovering around the 4% mark.
Earlier this year, VGV completed the acquisition of RBS’s HQ at 7, 8 and 10 Brindleyplace from Tritax for £130m, representing an initial yield of 5.75%.
Cushman & Wakefield and Eastdil represented The Carlyle Group. JLL acted on behalf of Ashby Capital.