Ballymore's sale of £128m offices to benefit Anglo
Published 24/11/2009 | 05:00
Sean Mulryan's Ballymore Properties has agreed the sale of a Birmingham office block at a higher than expected price of about £128m (€142m).
The Irish taxpayer-owned Anglo Irish Bank is also set to benefit from the sale as some of the proceeds will go towards paying down some of the loans which Anglo provided for the development.
German fund Commerz Real has agreed to purchase the 250,000 sq ft site known as 1 Snowhill, which is 85pc pre-let to KPMG and Barclays at rents of around £33 per sq ft (€395 per sqm).
Ballymore has also offered a five-year rental guarantee on the 36,000 sq ft of remaining vacant space at around £27.50 per sq ft (€329 per sqm). Consequently, Commerz Real can expect to generate a yield of around 6.2pc.
A spokesperson for Ballymore told the Irish Independent that some of the proceeds would go towards Anglo Irish Bank and the rest will be used for further building development.
The construction of the neighbouring 350,000 sq ft office block, known as 2 Snowhill, was delayed earlier this year due to the downturn and lack of development finance available.
Law firm Wragge & Co has taken a pre-let on 250,000 sq ft of space in 2 Snowhill. Other elements include a 44-storey apartment tower and a Westin hotel and spa.
When Ballymore put 1 Snowhill up for sale in September, its agent Jones Lang LaSalle was asking £111m, (€123m). In response, it received eight bids, mainly from overseas investors, including Israeli investor Igal Ahouvi and the Luxembourg-based fund manager Aerium.
Local financial observers say that there has been a recent upsurge in demand as a weight of money is chasing prime UK investment property of which there is also a shortage in the current market.