The building is at the heart of a redeveloped city centre. Credit: via C&W

Prime Sheffield office up for grabs

20 August 2024 11:09 Neil Tague Comments (0)

Bids of £17.7m are invited to acquire 3 St Paul’s Place, a 76,000 sq ft office in the city’s commercial core.

Cushman & Wakefield has been tasked with finding a taker for the Norfolk Street asset, with offers exceeding £17.68m asked for.

A purchase at this price would reflect a net initial yield of 9.92% and a capital value of £231 per sq ft.

In total, the building offers 76,460 sq ft over 10 floors. The tenant line-up includes architect BDP, law firm Freeths, Handelsbanken, TES Global and Ove Arup & Partners, with the building bringing in an annual rent roll of close to £1.9m.

TES and Arup each account for around 20% of rental income. On average, the unexpired lease terms across the building are 3.4 years to expiry and 2.4 years to breaks.

The building is EPC B-rated and BREEAM Excellent. Designed by Hodder + Partners for CTP, it was acquired by M&G Real Estate in 2018 for £24m.

Asset management opportunities, as set out by C&W, include letting of the part-empty first floor (just 4,178 sq ft is available in the whole building), enhancing furnishings and decoration in some areas, and regearing the Arup lease, which is due to expire in 2026.

Sheffield office rents are on the up, said C&W, showing the strongest growth of any English regional city in 2023. Over 11 years, headline rents have climbed by 37% from a low starting point of £19 per sq ft.

Office take-up on the city is around 300,000 sq ft on average, with 2023 being the strongest year since Covid. Grade A space in such a central location is tough to find though, said the agent, with only four schemes in the works offering the same quality of space to tenants.