Leeds City Council has bought Kier and Bruntwood’s 3 Sovereign Square for £43.8m in what is believed to be the largest post-Brexit deal in the UK.
The council has forward-purchased the 93,851 sq ft office development which is due to complete in September.
Law firm Addleshaw Goddard has anchored the scheme with a 17.5-year lease for 50,000 sq ft at £26 per sq ft.
Retail and leisure operators have agreed terms for the 10,000 sq ft ground floor and deals are close to being finalised for the remaining office space in the building.
Henrie Westlake, head of the north at Knight Frank, which advised the joint venture, said there was “strong interest” from UK and overseas investors but the decision to proceed with the council was based on its desire to benefit from the success of the region.
He said Knight Frank was confident it would continue to attract investment from across the UK and abroad. “With bond yields at historic lows and extreme volatility in the stock market, property represents the most compelling option for investors,” he said.
Tom Gilman, managing director of Kier Property North said: “The significance of this major deal could not be over-estimated. It shows that, confidence remains in property as an asset class.
“The fundamentals of the commercial property market are very sound, offering significantly better yields than other investment classes, driven by attractive and secure income returns.”
Councillor Richard Lewis, executive member for regeneration, transport and planning for Leeds City Council, said: “We’re absolutely determined to drive the strong Leeds economy forward, while being a compassionate city that embraces opportunity for all.
“Our proactive approach to economic development underpinned by wise asset investment and management enables the council to be a real catalyst in stimulating the local economy.”
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