Leeds’ Central Square sells for £78m

Ashtrom Properties UK has acquired the 230,000 sq ft asset, in the heart of the city’s commercial core, in Leeds’ largest office investment deal for more than five years.

CBRE and Knight Frank represented Ashtrom, with Savills working for the vendor.

Developed by M&G, the eyecatching Central Square was designed by DLA Architecture. The building offers 217,249 sq ft of office space across 11 upper floors, above 13,126 sq ft of retail and F&B space at ground floor level.

The sale was described by Henrie Westlake, head of the North for Knight Frank, as a deal that will “almost certainly be viewed as the bellwether deal of this cycle”.

Central Square offers some of the largest column-free floorplates in the city at around 25,000 sq ft, and also houses a winter garden and sky garden with breakout and entertainment space for tenants along with 128 basement parking spaces. It is BREEAM Outstanding and EPC A-rated.

Guy Lewinsohn, chief executive of Ashtrom Properties UK, said: “We remain committed to strategically investing in the UK’s regional markets, confident they offer substantial opportunities for sustainable growth and long-term value creation.

“The successful acquisition of this prominent building in the heart of Leeds marks a significant step in our ongoing commitment to invest in the future of the UK’s regional city centres, which we believe are poised for strong growth.”

Located off Wellington Street and Whitehall Road close to Leeds station, the building has attracted occupeirs including PwC, RSM UK, Freeths, Sky, Sanderson Weatherall and XPO Logistics.

CBRE executive director Will Kennon said: “Central Square is one of the best regional office assets located outside of London. Leeds is experiencing significant growth across all metrics, and the office market is facing an acute shortage of prime office space which we believe will lead to continued strong rental growth over the next cycle.

“With the market facing continued development viability challenges, we consider this acquisition will deliver strong risk adjusted returns over both short and long term.”

Westlake added that as a long term holder of assets, Ashtrom’s strategy is “driven primarily by the strong underlying market fundamentals that will drive rental growth for prime assets. Notwithstanding this, there is no question that a normalised market will see significant yield compression that will further validate this approach”.