OFFICE BLOCK SOLD FOR £51m
A CITY centre office block has been snapped up in a £51m deal.
One Central Square, next to Cardiff Central train station, has been bought by Luxembourg-based real estate fund manager Aerium from financial services giant Legal & General.
The block, which is the first to be completed as part of the Central Square regeneration scheme, was sold to L&G in a deal understood to be in the region of £40m in 2015.
At the time the then under construction building only had a pre-let tenant in law firm Blake Morgan.
The building is now fully let with other tenants including Julian Hodge Bank and vehicle finance company MotoNovo.
The 134,940sq ft building, which was designed by Cardiff-based architectural firm Rio, generates an annual rental income of just under £3m a year.
It is next to the under-construction 135,000sq ft Two Central Square building, which is already fully let to law firm Hugh James and Cardiff University’s School of Journalism, Media and Cultural Studies.
The building will be ready for occupancy next summer. Alongside it will be the new £120m headquarters for BBC Cymru Wales.
Some 1,000 staff at the public service broadcaster will begin a phased move into the building – from the current BBC Wales HQ and studio site in Llandaff – from autumn 2019.
On completion, ownership of the buildings, which are being delivered by Rightacres, will pass to L&G.
When fully developed, Central Square will provide one million sq ft of office, residential and retail space.
Robin Carr, co-chief investment officer at Aerium, said: “One Central Square is a strong addition to our portfolio, providing us with access to a transformational development at an early stage of its life.
“We firmly believe that this area of Cardiff, directly adjacent to the Central Station, presents a highly appealing offering to occupiers, as demonstrated by the covenant strength of our building’s tenants.
“With the BBC taking up occupation opposite us in 2019, and the huge improvements under way to the wider public realm, we have no doubt that this area of Cardiff will continue to flourish.”
Tom Roberts, head of strategic investment and regeneration at L&G Real Assets, said: “The sale of One Central Square realises our business plan to attract third party capital into completed phases of this transformational Cardiff regeneration project, allowing us to focus on future phases of development with our partner Rightacres and, together, seek new economic growth opportunities that are a good match for our capital.
“The Central Square project continues to evolve at an extremely impressive rate and the appetite from investors such as Aerium is testament to the quality of product being created at this gateway regeneration site.”
The Cardiff office of international property advisory firm, Knight Frank, acted for Legal & General on the investment deal with Aerium.