Flagship Bristol city centre office development The Paragon has been sold for £26.5m in a deal described as the most significant investment transaction in the city of the past 12 months.
Bristol Cubex Land developed the 75,373 sq ft building in Victoria Street two years ago backed by London-based Palmer Capital Partners.
Now, with the building 85% let, they have sold it to Invesco Real Estate, the European specialist investment manager with £18bn of real estate assets under management worldwide.
The Paragon, widely regarded as one of Bristol best modern office developments, holds BREEAM ‘excellent’ status for its environmental credentials and has parking for 39 cars, seven motorbikes and 36 bicycles.
Tenants include law firm Thrings, which took the fourth and fifth floors on a pre-let. It has recently been joined by accountants Ernst & Young and HR consultants Mercer Limited. Tesco occupies one of the three ground floor retail units.
The investment is held on a 150-year lease from Bristol City Council at an annual ground rent of £93,000. The building generates a net annual rent of £1,848,397. The investment price reflects a net initial yield of 6.62%.
Cubex director Peter Walford, who formed the property development business in 2004 with Josh Roberts and Gavin Bridge, said: “This deal is perfectly timed with the building let and an imbalance between demand and supply in central Bristol creating a market dynamic providing excellent prospects for rental growth – which together have driven the price achieved.”
Palmer Capital director Chris Button added: “This is the most significant investment deal in Bristol in the last 12 months. The sale is the product of a quality building and a perfectly executed business plan, combining Cubex’s development expertise and Palmer Capital’s funding strength. The tenant line-up goes to show how quality will always attract quality.”
Bristol property agents Hartnell Taylor Cook advised Invesco with Jones Lang La Salle and GVA advising Cubex Land and Palmer Capital.
