Landmark office building sold to German investor for £10m

The deal has been hailed as a sign that Yorkshire is back on overseas investors’ radar, after the region’s profile was raised by the success of last year’s Grand Depart of the Tour de France, which attracted millions of spectators.

Acting on behalf of Aberdeen Asset Management, CBRE’s Leeds capital markets and office agency teams have sold No1 The Embankment on Neville Street, a 53,000 sq ft office at the south entrance to Leeds, to Patrizia on behalf of one of its German investors for more than £10m. No 1 The Embankment is let to professional services firm KPMG, who have been based there since 1990, and are due to move to a 61,000 sq ft property at Sovereign Square in Leeds later this year.

A CBRE spokesman said: “KPMG’s relocation allows Patrizia the opportunity to undertake a comprehensive redevelopment of the building, to provide Grade A office accommodation, which will be available in 2016.”

Stuart Paterson, of Aberdeen Asset Management said; “The building has proved to have been a good investment over a number of years, and we decided market conditions were right to dispose of the property. We wish Patrizia every success with their proposed scheme”.

Michael Hill, a director at Patrizia, added; “We were attracted by the building’s prominent location at the southern entrance to the city centre and the buoyant Leeds economy”.

Alex Whiting, senior director of Capital Markets at CBRE Leeds, said; “Aberdeen Asset Management decided to sell No 1 The Embankment before the expiry of KPMG’s lease in 2015, and the strong Leeds occupational and investment market ensured a good level of interest from local, national and overseas investors.

“The deal highlights increasing investor appetite for commercial property in Leeds and Yorkshire, particularly from overseas investors looking for an alternative to the overheating London and South East. Leeds is back on the radar of many investors attracted by the buoyant economy and attractive investment returns. The success of the First Direct arena, Trinity Shopping centre and the Tour de France Grand Depart has greatly increased the profile of Leeds both nationally and internationally.”

Mr Whiting said he was speaking to investors from Europe, North and South America and the Middle East who were interested in investing in Yorkshire. According to Mr Whiting, No 1 The Embankment has the potential for extension, redevelopment and refurbishment, subject to planning permission, although he didn’t know what plans the new owner had.

A spokesman for Patrizia, which has its head office in Augsburg in Germany, said the company had no further comment.

Andrew Allen, the head of global property research and strategy at Aberdeen Asset Management, told The Yorkshire Post: “We have long believed that the high quality regional cities show resilience, less volatility and can adequately provide long term investors with appropriate returns on their investments.”

“Of-course, economic situations can shake things from time to time and, specific buildings carry specific risks and opportunities that may or may not sit well with the objectives and risk tolerances of specific clients.”

Earlier this month, KPMG was handed the keys to the One Sovereign Square office development. The firm expects to move its 750 Yorkshire staff into its new HQ in Leeds by October this year. It is the first of a number of developments on Sovereign Street which aim to turn it into a vibrant hub.