Developer acquires landmark city centre building

West Riding House in Leeds city centre, which is home to Next, Tesco and Urban Outfitters as well as a number of office occupiers, was bought this week by real estate investor, developer and private equity fund manager Moorfield Group on behalf of the Moorfield Real Estate Fund II in a deal rumoured to be worth £48m.

Andrew Rodger and Roger Phillips, from GVA in Leeds, were appointed as Law of Property Act Receivers by Anglo Irish Bank Corporation in 2010 after an Irish developer defaulted on a loan that it used to buy the block for £75m at the top of the market in 2005.

Moorfield is keeping its plans for the building under wraps at the moment but said it would consider extending the existing facilities.

One of its first tasks will be to find a new occupier to replace Next when it moves out of the building’s biggest store and into the new Trinity Leeds shopping centre, which is being built nearby, in 2013.

Andrew Foster, director at GVA, said: “Next is going to be situated next to the west entrance of the new scheme so footfall around that area will be huge. It’s not a major problem for Moorfield because it’s an attractive unit.”

West Riding House, which fronts Bond Street and Albion Street, comprises 64,000 sq ft of prime retail space and 76,000 sq ft of offices, supported by a 440-space multi-storey car park.

All but one of the shops are occupied and about 50 per cent of the office space is taken up by businesses including outsourcing giant Capita and recruitment company Badenoch & Clark.

Moorfield said it came across the investment through its joint venture partnership with Leeds-based Holbeck Land. The partnership, announced in July 2010, aims to identify investment and development opportunities in the Yorkshire and Humber region for Moorfield Real Estate, a geared fund which raised approximately £400m of private equity on closing at the end of 2007.

Marc Gilbard, chief executive of Moorfield, said: “A scheme of this size in such a prime location made West Riding House a very interesting investment opportunity. There is the scope to further asset manage this building by attracting new occupiers and exploring the opportunity to extend existing facilities.”

Ian Barraclough, of Holbeck Land, added: “With founder directors Robert Firth and Freddie Coupe we have a long-standing association with the building and our appointment to work alongside Moorfield as joint asset managers provides the opportunity to combine our knowledge and skills to enhance the performance and efficiency of the investment.”

The sale of West Riding House is the city’s second biggest deal in the last 12 months after the £51.3m sale of 1 Whitehall Riverside by London & Stamford Property to NFU Mutual Insurance Society in February 2010,

Mr Foster said: “This is a monumental deal for GVA given that it was the largest LPA appointment any firm has handled in Leeds in recent years.

“We were confident, given its prime city centre location, the fact there isn’t a lot of stock of this lot size anywhere in Leeds and the fact that the investment market is now more buoyant, that West Riding House would attract significant interest.”

Simon Lister, director at Savills which acted for Moorfield Group, added: “This deal represents a unique and significant transaction for the Leeds market and offers a great opportunity for Moorfield and Holbeck Land to unlock the potential of this asset.”

Meanwhile, a trio of other city centre office buildings worth a combined total of £7m have also been sold. Cornerstone Real Estate Investors acquired 2 Brewery Wharf, part of the Brewery Wharf development on the southern fringe of Leeds city centre, for £5m, reflecting a net initial yield of 8.3 per cent, while Prospect House on Sovereign Street in Leeds city centre, a former warehouse which was transformed into the city’s first serviced office building in the 1980s, was bought by a private London-based buyer for £2m.

The Brewery Wharf building, developed by Rushbond, is a 26,000 sq ft office let to Mott MacDonald and the NHS Confederation with less than 3,500 sq ft of vacant accommodation.

Cornerstone acquired the office from PricewaterhouseCoopers which was acting as the LPA Receiver for Morris Properties. Cornerstone was advised by Drivers Jonas Deloitte and PwC was advised by Brackenridge Hanson Tate.

The 18,643 sq ft Prospect House building was sold by Monument Investments, which was advised by the capital markets team at CB Richard Ellis.

The building has been occupied by serviced office company Prospect Business Centres since the 1980s and the company has committed to lease the building for a further 15 years.

WILTON STARTS SECOND DEVELOPMENT

Wilton Developments has begun its second speculative development in the centre of Leeds after buying another building.

The company bought 28 Bond Court, formerly known as Midland House, and previously occupied by HSBC, which will now undergo major refurbishment.

When complete in September 2011, it will deliver 15,250 sq ft of office and retail space to the Leeds market, which it says will particularly appeal to smaller office occupiers. Planning permission is expected soon on ground floor retail elements.

It comes in quick succession to the firm’s 10 South Parade scheme – Leeds’ only speculative office development of 2010, which is now more than 50 per cent pre-let. DTZ and Knight Frank are acting as joint letting agent, with Pudney Shuttleworth appointed to market the ground floor retail space.