M&G Real Estate JV acquires GBP105m Manchester office building

M&G Real Estate has acquired a 165,000 sq ft newly built prime office building in Central Manchester for GBP105 million, at a net initial yield in excess of 5.3 per cent. The acquisition is a three party joint venture made on behalf of its Capital Solutions business headed by Martin Towns.

The purchase of 101 Embankment, which is located at the heart of the Cathedral District in central Manchester, has been made on behalf of M&G Real Estate’s UK core commercial property strategy in partnership with an Asian investor and West Yorkshire Pension Fund, one of the UK’s largest pension funds.
 
101 Embankment is the new head office of insurance firm Swinton, which has been let on a 10-year term. The high specification premises include a 442 space car park, let to Q-Park on a separate 35-year term.  The leases include guaranteed rental increases.
 
Martin Towns, Head of Capital Solutions, M&G Real Estate, says: “There is an increasing trend in global real estate for large institutional and sovereign wealth investors to partner with established fund management companies through joint ventures and separate accounts. We believe in investing time to truly understand our clients’ unique preferences and requirements, using our skills and experience to create bespoke strategies and investment opportunities that work for them.
 
“We are delighted to be working with West Yorkshire Pension Fund and a leading Asian investor to help them meet their real estate investment objectives, whilst also enabling our UK core commercial property strategy to access a highly attractive asset.”
 
Simon Edwards, Alternatives Investment Manager of West Yorkshire Pension Fund, adds: “We are very happy to be entering into this long term partnership. Thanks to M&G Real Estate’s expertise in sourcing and structuring this deal, we stand to benefit from stable returns from a high quality asset and meet the strategic objectives of our Fund.”