Sale of Howells building is put on hold due to virus
THE sale of the Howells building in the centre of Cardiff has been put on hold. The Grade II-listed building was on the market and shaping up to be one of the biggest commercial property deals of the year, but as a result of the Covid-19 pandemic, the marketing process has been paused.
Avison Young were appointed as fixed charge receivers for the building at the end of 2019. The firm was tasked with selling the iconic building, which extends to 270,000 sq ft, in the hope of securing some return for the financiers of the acquisition.
A spokesman for Avison Young said they have “received a considerable amount of interest”.
The Cardiff city-centre property had been acquired by Naissance Capital Real Estate in 2016 for £37m, while the property asset was owned by a special-purpose investment vehicle based in Jersey called Wallace
Properties.
The deal had been financed by a combination of equity investment and bank debt. The property asset itself and not Naissance is in receivership.
Nathan Pask, at Avison Young, said: “We’ve completed all the due diligence on the Howells building, but we have taken the decision to pause the marketing process at the current time due to the unprecedented times we’re all going through.
“We believe this is the responsible approach and will be resuming as soon as we feel it’s appropriate. House of Fraser continues to trade within the building.”
In December property developer Cubex confirmed it had an interest in acquiring the historic building.
The Bristol-based firm, which has a track record in repurposing landmark buildings into new mixed-use schemes, said it has been monitoring the news of the building as a target for quite a period of time against the backdrop of the challenges facing the high-street retail sector more widely and the continued uncertainty over the building’s only tenant in House of Fraser.
Cubex has confirmed it will formally bid for the asset early next year, with long-terms plans to transform the Grade II-listed building into a new mixed-use development — with potential for a four-star hotel, residential, office and leisure space, with scope too for some retail.
A leaked report from consultants Gleeds at the end of last year revealed the cost of renovating the building would be around £25m for basic repairs and up to £45m to incorporate a hotel and other developments.
Over the summer Azeemeh Zaheer, chief executive of Naissance Capital, had revealed plans to transform the Victorian building to provide new leisure, food and beverage, residential and office space.
The plans also included uncovering the Bethany Chapel, which had in effect been swallowed up by the building.
Cubex said the Howells building couldn’t be developed in isolation, but that any scheme had to create a “sense of place”, with each commercial element interconnected.
Elgan Jones, business development director for Cubex, told the Western Mail in December that he was unable to say what Cubex would be prepared to offer for the property asset and what level of investment would be needed to redevelop the building, although confirming that it would be substantial.
Mr Jones said any development could take between four and five years to complete, with the first phase on securing planning taking between 12 and 15 months.
“We would bring everyone together – Cadw, the local authority, various business stakeholders and the public – on a journey to create a sense of place and accessibility for such an iconic building, similar to our Finzels Reach project in Bristol,” Mr Jones said.
“This would not be a quick win, but a scheme that you have to live and breathe for the long term.
“Yes, repurposing the building will require deep pockets, but it is more about passion.”