Ashtrom Properties UK has purchased Birmingham office building Colmore Gate for £39.5 million.
A landmark on the Birmingham skyline, Colmore Gate comprises 171,834 sq ft of office and retail space across 18 storeys and 86 secure basement car parking spaces. It offers a unique asset management opportunity in 100% prime position in Birmingham City Centre.
Currently let to five tenants including Crown Prosecution Service (CPS), AON and Tesco, Colmore Gate has an has an average weighted unexpired term of 3.4 years to expiry and 1.6 years to break and average rent of £24.37 per sq ft on let space.
The building is located in the heart of the city centre opposite Snowhill Railway Station and within the Colmore Business District, home to approximately 500 companies encompassing over six million sq ft of highly concentrated office space.
Guy Lewinsohn, CEO of Ashtrom Properties UK, comments: “The acquisition of Colmore Gate is in line with our current strategy of investing in UK regional cities. We are excited to transform this landmark into a unique and exciting office building with strong ESG credentials and unrivalled amenity. We are thrilled to add this office building to our growing portfolio across the country.”
Joshua Morris, Partner in the Capital Markets team at Knight Frank, comments: “We’re thrilled to have advised Ashtrom Properties on its purchase of Colmore Gate. The impressive landmark building represents a rare opportunity to deliver a significant repositioned office scheme into a supply-starved market place. Birmingham’s office market is witnessing a constrained level of existing Grade A supply, with tenant demand rebounding to pre-pandemic levels as new requirements emerge.”
Knight Frank acted on behalf of Ashtrom Properties. JLL acted on behalf of Aviva Investors.
One of the fastest growing cities in the UK and Europe, Birmingham is experiencing unprecedented levels of investment, development and infrastructure improvement, with construction activity across all sectors at its highest since 2008. Prime office rents in the city have increased from £30.00 per sq ft in 2015 to £37.50 per sq ft in Q2 2021 and are expected to rise further in the coming years.
Ashley Hudson, Head of the Birmingham office at Knight Frank, said: “Birmingham’s office investment market had a bumper Q4 2020 with over 50% of the city’s £228 million of transactions closing in the final quarter of the year. Occupier activity is equally robust despite the impacts of the pandemic, with take-up in Q2 2021 reaching 203,499 sq ft. This deal showcases not only the strength of the asset, but also the increasing appetite for investment into the city.”