Skanska has exchanged contracts for the sale of its prime, city-centre office development in Bristol – 66 Queen Square – to Aviva Investors Property Trust for £32.7 million.
The property comprises 61,484 sq ft (5,711 sq m) of grade A office space, combining a new five-storey building integrated with a fully modernised and refurbished grade II listed Georgian terrace building. Construction will complete in October 2015.
The scheme is 90 per cent pre-let at present, at a headline rent of £28.50 per sq ft. KPMG has agreed a 15-year term and Handelsbanken has agreed a 10-year term, both without tenant breaks.
Andreas Lindelöf, Managing Director Development, Skanska UK, said: “This is a fantastic result for us. We started this speculative development in 2013, confident that the timing was right for the Bristol office market, and we have been proven correct.
“We have secured an exceptional occupier – KPMG – for the majority of the scheme and we are delighted that Handelsbanken has taken a 10-year lease. We are also close to letting the remaining space. The high quality of the development and great covenant has helped us to achieve a great result in the Bristol market and builds on the confidence in the UK’s regional office markets for developments like 66 Queen Square.
“We are excited about reinvesting the proceeds of the sale into our target markets of Bristol and London, and continuing to develop market-leading, sustainable office buildings.”
JLL and Alder King advised Skanska on the sale of the investment. Knight Frank advised Aviva Investors. Alder King and JLL are also letting agents for the development.
Available to let is the penthouse at 3,272 sq ft (304 sq m), plus the self-contained unit at 72 Queen Square at 3,077 sq ft (286 sq m).
An award-winning project, the development was crowned BIM Project Application Award winner in the annual British Construction Industry Awards 2014.
The 66 Queen Square deal follows Skanska’s successful divestment of its own Bentley Works in Doncaster in 2014, to the Skanska UK pension scheme.
Ongoing is Skanska’s development of The Monument Building in the City of London, where construction is underway and completion is due in the spring of 2016. Recently, the team also announced an off-market deal to purchase the leasehold of 51 Moorgate in London.
