Hot office market now target of Chile buyers

The new arrivals join the Middle Eastern, German, Swedish and North American investors who have so far dominated foreign interest in Manchester commercial property.

The Chilean-backed buyers of a Manchester city office block say they are hunting for more properties to buy as a wave of New World investors arrive in the north west.

Aprirose, the London-based real estate investment company, bought the 42,600 sq ft office block, 76 King Street, in Manchester, for £16m from Aspen Assets Limited.

CBRE acted for Aprirose on 76 King Street and WHR Property Consultants acted for Aspen. Aprirose are understood to have acted for buyers from Chile.

Elsewhere, South African buyers are said to be actively looking for city properties, along with others from the southern hempishere.

Gary Jones, chief operating officer at Aprirose, told Greater Manchester Business Week: “We already own and manage four assets across the leisure and healthcare sectors in the city.

“With the purchase of 76 King Street, it has strengthened our office portfolio and we are actively looking at more opportunities in the city and city fringe.

“We will continue to look for potential investments in Manchester as it is an enticing and exciting location in today’s real estate market.”

The new arrivals join the Middle Eastern, German, Swedish and North American investors who have so far dominated foreign interest in Manchester commercial property.

Steve Carrick, capital markets partner at Knight Frank in Manchester, said: “We’ve seen North American money buy into Manchester for years – most recently the £35m purchase of the Anchorage office buildings, Salford Quays, by Cording real Estate and US-based private equity group HIG Capital – but now we are seeing a new wave of investors from Chile, South America and elsewhere.

“The market has been slower than last year, but there are still deals to be done.

“We have some very large transactions waiting to complete – perhaps £250m-worth of new deals to be done in January and February.”

Among the deals expected soon is the sale of Clarence House by HIMOR, an Ainscough family property business.

They bought the block in 2012 for just £2.8m. The block is now fully let after refurbishment in 2013.

Carrick said: “Investors are still interested, and pricing is a little bit steamy for the very best Grade A offices, but we’re still some way off the prices we saw in 2007 at the highest point of the boom. I see no reason why the market will slow down.

“There are still opportunities to buy good buildings with rents in the mid-£20s a sq ft, which could provide good income growth for new owners.”

Investors slowed their pace throughout the UK’s regional property markets during 2015.

According to JLL, total investment in UK property was down 27 per cent in the nine months to September.

Manchester’s share of the market remains high – but the total volume is falling in line with national trends and is not expected to match the £1bn recorded in 2014. Some suggest a figure closer to £550m is more likely.

The first six months of 2015 saw total Manchester investment deals of £282m, according to Knight Frank.

This included the £91.7m sale of 3 Hardman Square to M&G and the £16.8m sale of 7 Norfolk Street to German buyers Deutsche Assets & Wealth.

Over the summer, German pension fund Deka Immobilien bought One St Peter’s Square for £130m in deal with Argent and the Greater Manchester Property Venture Fund.

Aprirose acted with Chile-based Stars Investments, to acquire 76 King Street.

Stars Investments was founded in 2009. As of November 2015, the real estate portfolio included holdings in the US, UK and Chile, totalling more than 1.1 million square feet.

Oscar Boettiger, real estate investments manager at Stars Investments, said: “We believe Manchester is a great location for our real estate investment programme.

“It is an attractive and growing market, with sustainable positive long term dynamic.”