Tritax-led syndicate to buy Brindleyplace trio

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Private investor group places three offices under offer at Brum scheme

A group of private investors formed by Tritax Securities has placed three properties at Birmingham’s Brindleyplace complex under offer for just more than £100m.

The properties at 7, 8 and 10 Brindleyplace comprise 110,000 sq ft, 96,000 sq ft and 88,000 sq ft respectively, and are let to the Royal Bank of Scotland until 2029.

The transaction is one of the biggest-ever regional office investment sales.

Property Week revealed in April (news, 17.04.09) that Argent was marketing the three properties for the Brindleyplace Limited Partnership at a combined guide price of £103m, reflecting a net initial yield of 7%.

Tritax previously advised the 400 investors who originally invested in Brindleyplace Limited Partnership, which owns eight of Brindleyplace’s 11 office properties.

The partnership was established in 2003 for an initial six years and will be extended in the summer for a further period of up to 10 years.

The partnership comprises BT Pension Scheme, which holds a 22.5% stake, Royal Mail Pension Plan holds 17.5%, Argent 10.01% and 400 Tritax-represented private investors hold 49.99%.

BT Pension Scheme owns Argent, which manages the estate.

Tritax’s new investor syndicate, which includes some of the original investors, will own the three properties in a vehicle separate from the Brindleyplace Limited Partnership.

The three properties attracted bids from a wide range of parties, among them the investment arm of the Malaysian government and Israeli investor Igal Ahouvi.

RBS pays £24.50/sq ft at 8 Brindleyplace and £25/sq ft at 7 and 10. There are break clauses on two of the buildings in 2019 and 2024.

There is also an outstanding five-yearly rent review, but Gary Taylor, joint managing director of Argent UK Developments, said any increase in the rent would be minimal.

The sale will enable the partnership to refurbish the 120,000 sq ft 5 Brindleyplace. BT’s lease at the property expires in 2012.

The partnership will then buy 11 Brindleyplace when it is fully let. The property was completed in March.

King Sturge represents Brindleyplace Limited Partnership; SG Commercial advises Tritax.