Bristol City Council has purchased City Point, a 54,275 sq ft office investment for £9,000,000, situated opposite Temple Meads Railway Station, in Bristol’s city centre.
The council, who already own the freehold interest, has purchased the long leasehold interest from Business Environment City Point Ltd, a successful serviced office operator, on a sale and part leaseback basis. They have taken a 15 year unbroken lease on the 6 floors they occupy and will be paying 47% of the annual rental. Other office occupiers include Purple Secure Systems Ltd, CTI Hotels Ltd, Top Web Ltd, LOM (UK) Ltd and Space engineering Services Limited. The ground floor is retail, occupied by Branches of Bristol and the Reckless Engineer Public House, which is sold off on a long lease.
The investment,approved by Cabinet last year, generates an annual income of £745,643 and reflects a net initial yield of 7.83%.
Bristol City Council, advised by Hartnell Taylor Cook LLP and DAC Beachcroft Solicitors, see this as an excellent long term investment with almost half of the income secured for 15 years. It provides the city council with a secure income stream from a strong tenant line up and benefits from parking for 120 vehicles. City Point is located in the heart of the Temple Quarter Enterprise Zone providing occupational benefits and is immediately opposite Temple Meads Railway Station.
George Ferguson, Mayor of Bristol said: “The purchase of this building is another good deal for Bristol, giving the council a better rate of return from our investment than can be obtained elsewhere. It also allows us more influence over this key site in the Enterprise Zone in the longer term to help meet our ambition to improve this vitally important gateway to Bristol and the city region.
Ian Lambert of acquiring agents, Hartnell Taylor Cook LLP said: “We were delighted to advise Bristol City Council on their purchase of this asset. The building is fully occupied and offers excellent rental growth opportunities, particularly as it is strategically located in an improving location and situated immediately opposite the city’s main railway station.
“In addition, the building will benefit from the Temple Quarter Enterprise Zone proposed infrastructure investment including the Bristol Arena, Temple Greenway and Temple Circus roundabout realignment. With improved connectivity also provide by the citywide Metrobus Scheme, the overall positive story of City Point is compelling.”
Mark Rothwell, commenting on behalf of Business Environment, explained that “This deal is one of those rare transactions that genuinely benefits all the parties involved, Bristol City Council will enjoy an attractive return and benefit directly from the growth generated by their investment in the Enterprise Zone while my clients will use the capital that the sale released more efficiently by expanding their business centre operations, which are currently seeing unparalleled demand.”
Business Environment City Point Limited was advised by Rothwell Property Consultants and Michael Elliott. Hartnell Taylor Cook LLP’s Building Consultancy and Management team provided additional advice on the purchase, working in conjunction with DAC Beachcroft on the legal aspect.