Joint Venture sells 101 Embankment to M&G-led club for £105 million

A joint venture comprising Ask Real Estate, European Property Investor Special Opportunities 3 (EPISO 3), the opportunity fund advised by Tristan Capital Partners, and Carillion has sold the new headquarters building of UK insurer Swinton in central Manchester to a consortium led by M&G Real Estate for £105 million. 

EPISO 3 sold its majority interest in the 165,000 sq.ft., Grade A office development called Embankment 101 to a consortium formed by M&G Real Estate with a leading Asian investor and West Yorkshire Pension Fund. The building was completed in Q1 2017.

Peter Mather, Managing Director of Investments at Tristan Capital, said: “The dire shortage of new Grade A office stock in Manchester and Salford made this development particularly attractive. There is still insufficient space to satisfy demand in these thriving business communities, giving us good visibility for the second phase of the project. The sale of Embankment 101 to a club of institutional investors completely validates the fund’s value-add strategy, delivering a healthy return to our investors.”

John Hughes, Managing Director at Ask Real Estate, said: “The recent landmark letting to Swinton has established the appeal of the Embankment scheme to major employers, and with the second phase now committed, this additional 166,000 sq. ft. building is set to enhance the city region’s growing business base providing further opportunities for potential occupiers and investment funds alike.

Embankment 101 is in Greengate, a regeneration area in Salford across a foot bridge from central Manchester’s main business, leisure and retail hub. The building faces Manchester Cathedral and benefits from excellent public transport links due to its proximity to Victoria Station and the Exchange Square Metrolink. 

Swinton agreed to lease the entire 10 floors of Embankment 101 in November 2016, signing a commitment to occupy the premises for more than a decade. The building and a second that is scheduled to be built nearby will stand above a 442-space underground car park leased separately for 35 years by operator Q-Park.   

James Porteous, Director at JLL, said: “We are delighted to have advised the joint venture with the disposal of this iconic building set in a unique environment at the heart of the Cathedral District.  This building sets a new standard in quality for offices in Manchester.   The transaction demonstrates the growing appetite from global capital for investment opportunities in Greater Manchester.  Approximately 76% of office transactions in 2016 were with overseas investors who are clearly attracted to the city and its current shortage of high quality accommodation.” 

EPISO 3 became the principle investor in the Embankment project by joining the development partners and co-investors Ask Real Estate and Carillion plc in March 2014 in partnership with Salford City Council and Network Rail. The final phase of the project involves the delivery of a second 166,000 sq. ft. office building, Embankment 100, which is scheduled to start on site in Q4 2017. 

Advising EPISO 3 on the sale were JLL. The M&G consortium’s advisers were CBRE.