Legal & General Property has acquired the Birmingham headquarters of Mitchells & Butlers (M&B) from LaSalle Investment Management for £69.5million, reflecting a net initial yet of 3.94%.
L&G’s freehold purchase of the 95,000 sq ft Grade A office building was made on behalf of its Limited Price Inflation Income Property Fund, and is the fund’s first major regional city centre office asset. The recently refurbished Ibis hotel on Fleet Street and Lionel Street is also included in the deal.
The office building was purpose built for M&B in 2003, and the pubco, which operates a range of leading brands including Toby Carvery, Miller & Carter and All Bar One, will remain as tenant having signed a 35 year lease in January 2009.
Senior fund manager at Legal & General Property, Derek Gilby, commented: “We believe that Birmingham is set to benefit from a number of significant infrastructure projects already underway and the asset is well positioned to gain from the regeneration of the adjacent Paradise area which is undergoing a rapid transformation.
“Mitchells & Butlers offers the fund a strong tenant convenant, providing secure, inflation-proofed income over a long lease term, yet with the benefit of market rental upside.”
This is the second time the property has been sold in less than 18 months, after it was acquired by LaSalle in February 2014 for £51million.
Legal and General Property was advised by CBRE while JLL acted on behalf of LaSalle Investment Management.
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