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Trio shortlisted for major Manchester office opportunity

By Paul Norman - Monday, June 25, 2012 15:50

Three parties are on the shortlist to buy London Scottish House, one of Manchester’s largest and most prominent office development opportunities, from Ireland’s National Asset Management Agency, CoStar News understands.

Market sources this week said the Greater Manchester Property Venture Fund (GMPVF), Salmon Harvester Properties and the UBS Triton Property Fund have reached the final shortlist for the 50,000 sq ft former headquarters of the London Scottish Bank at 24 Mount Street at the heart of the St Peter’s Square regeneration zone in Manchester city centre.

The site had been earmarked by previous owner Irish developer Walls Group for a 200,000 sq ft office development.

NAMA, which holds the debt on the building, instructed WHR and CBRE in April to market the site, which Walls bought in 2007 for £20m.

Options for the site also include an extension to double the existing size of the building to 100,000 sq ft.

The building is currently occupied by charity Age Concern.

Mike Hawkins of WHR has previously described the site as one of the most significant redevelopment sites within the area with the potential to be “one of Manchester's iconic landmarks”.

According to Savills’ latest research diminishing office supply in Manchester is beginning to generate signs of a recovery in rents and a reduction in incentives.

Savills reports that with supply in Manchester appearing to have peaked, the vacancy rate stands at a reduced figure of 11.7%, with grade A availability at 730,049 sq ft.

With a restricted development pipeline and demand for new space in the city increasing, Savills said it “expects the pendulum of power to begin to swing back in favour of the landlord”.

Savills said prime office rents in Manchester stand at £30 per sq ft following the QBE Insurance letting at Chancery Place, a 7.1% increase on the highest rent achieved in 2011.

pnorman@costar.co.uk