WP Carey acquires GBP40m UK government office facility
WP Carey has acquired an office facility of the Department of State for Communities and Local Government (DCLG), a department of the UK government located in Manchester, UK.
The total acquisition cost of the facility was approximately GBP40m (EUR55m).
The facility is leased to the DCLG on a 15-year, triple-net lease and is currently occupied by the UK's tax department, Her Majesty's Revenue & Customs (HMRC). HMRC has consolidated its staff from several locations into the building, which now accommodates approximately 2,000 employees.
Manchester is the UK's third largest city, with the most active office market outside of London. The facility is located in Salford, situated to the west of the city centre in a key regeneration area. The ongoing redevelopment in the area is expected to increase the attractiveness of the location and have a positive impact on the local real estate market.
Jennifer Lucas, director of WP Carey, says: "The transaction demonstrates WP Carey's ability to source and complete attractive deals in key European markets. The UK is the second largest European economy and has a AAA-rating. Together with a government lessee, we believe we have secured a strong, long-term covenant. The recent staff consolidation into the facility demonstrates that this is an important location for HMRC, and supports our proven business model of acquiring key operating assets let to single tenants on long-term, net-leases."