Now Or Never? Birmingham Investors Offload As Bank Of England Stress Tests 40% Brexit Price Cuts
AshbyCapital and Legal & General are to offload two Birmingham office blocks in an unprecented £310M test of investor confidence in the second city as the Brexit crisis ratchets up.
The sales of the Colmore Building for £178M and the Lewis Building for £136M will set the tone in the city for months to come. They are launched as the Bank of England's Financial Policy Committee revealed their stress testing for what they call a "disorderly, cliff-edge Brexit" assumes a worst case scenario of a 40% fall in U.K. commercial property prices in the short term. Their conclusion was that the U.K. banking sector could weather such a storm.
The Open Europe think tank Monday published their own analysis which suggested the U.K. government could mitigate the risks, and limit medium-term impact.
AshbyCapital has appointed Savills and JLL to sell the 329K SF Colmore Building with an asking price in excess of £178M, a yield of 5.2%, CoStar News reports.
Ashby acquired the building in 2015 and has since refurbished it to include a café, a gym and a treatment room. The block is 90% let at average rents close to £30/SF.
Legal & General Investment Management Real Assets has appointed CBRE to advise on the £136M sale of the 110K SF Lewis Building and adjoining 137K SF Priory Court at a net initial yield of 5.75%, CoStar News reports.
LGIM acquired the block in 2014, and subsequently refurbished. Rents reach £32/SF with tenants including the Ministry of Justice.
