A massive city centre building has been bought in a £15 million deal as the redevelopment of Five Ways, in Birmingham, continues apace.
Seven Capital has bought Broadway, off Broad Street, which is set across four acres – one of the largest city centre plots – and is expected to redevelop large parts of it into about 250 apartments.
The off-market deal has been agreed with previous owner The Glanmore Property Fund and represents a huge fall on the £59 million the investment firm paid at the top of the market in 2007.
Seven will now pick up talks with gas and electricity firm Extraenergy which has been negotiating to move to the building amid plans to create up to 1,000 jobs in Birmingham.
It is the third major Seven Capital scheme at Five Ways as the firm is also behind the One Hagley Road apartment blocks and Park Regis hotel development opposite.
Seven now owns more than a million square feet at that end of Broad Street – an area about the size of Brindleyplace – after agreeing the latest cash deal with no bank debt.
Phil Carlin, managing director at Seven Capital, said plans would now be drawn up for Broadway and could constitute a “significant refurbishment” to create a popular living space.
He said: “The skill is to breathe life into the building. It’s people that make a building and if you have got two or three hundred people living there and people in the offices all of a sudden you have vitality.
“When you couple that with the hotel and One Hagley Road then you are talking about over 1,000 people living around that island, and from there a café culture and new retail opportunities start to pop up.”
Work on Broadway could begin within a matter of months as new permitted development rights – which encourage development at vacant offices – mean permission can be granted by February.
Mr Carlin said it would likely be completed by early 2016.
The deal for Broadway, one of the largest commercial buildings in the city core, at 256,648 sq ft, was concluded this week.
The giant plot includes a 91,757 sq ft Tesco – the largest foodstore inside the ring road – and 164,891 sq ft of largely vacant space over four blocks sitting above the store. The development also has a 794-space car park and petrol station while one of the four blocks is currently used as offices and will remain so.
Seven is expected to draw up plans for a residential scheme after seeing huge interest from its nearby One Hagley Road scheme, which saw 271 apartments sell out in five months.
On the matter of Extraenergy’s proposed move, Mr Carlin said there will be further talks with the company.
He said the deal on Broadway fits with the firm’s wider development strategy and the off-market transaction shows Seven’s ability to work with vendors on an exclusive basis.
We understand the deal was concluded in a matter of weeks.
The deal was advised by John Griffiths at GBR Phoenix Beard and Bal Sohal, chairman at Seven Capital, said the firm remained on the lookout for more investment opportunities in the city.
He said: “We are currently looking all around the UK for new opportunities and once again we see no better place to invest than Birmingham. With massive infrastructure projects well under way the city is top of the list for savvy residential investors which is great news for all stakeholders going forward.”
Seven Capital is also developing the Harrison Drape building in Digbeth, Britannia House on Great Charles Street and the Kettleworks in the Jewellery Quarter.
