The Co-operative is on the verge of selling its new Manchester HQ to a Far Eastern consortium represented by RREEF, Deutsche Bank’s property division.
The Co-op appointed Jones Lang LaSalle and WHR in July to handle the sale and leaseback on its 330,000 sq ft One Angel Square, which it will move into next year.
The deal with RREEF’s client is understood to be valued at around £140m, a yield of just over 6%.
Bruce Poizer, head of investment at the Manchester office of DTZ, said the deal would be the first significant Asian investment in Manchester.
“It’s a positive sign,” he said. “Manchester is no stranger to overseas investment but the Asian angle is a new one.
“One Angel Square ticks the boxes for a new investor – buying into a HQ, a quality build, a bank covenant and a secure income stream, so there shouldn’t be any nasty surprises. That’s all an investor wants when it’s getting comfortable with a new location.”
Sources suggested that One Angel Square, part of the Co-Op’s 21-acre NOMA regeneration scheme, had failed to attract a wide range of bids. Legal & General is understood to have looked at the block, however.
They said some investors were put off by recent trading figures from the Co-Op.
Its food retail business suffered a 2.1% drop in like-for-like sales in the year to December 31 and operating profits fell from £389m to £309m. It also saw market share drop to 6.6% in the 12 weeks to July 8, down from 7% the year before.
All parties decline to comment.
simon.binns@estatesgazette.com
