Calm in the property investment market has been broken with the multi-million pound acquisition of one of the city’s highest profile buildings.

On behalf of clients of IVG Funds, Jones Lang LaSalle acquired 2 Brindleyplace for £30.5 million from Bank of Ireland Private Banking – the first deal of that scale since the sale of 125 Colmore Row this year.

The 77,945 sq ft, six-storey office building, with 75 car parking spaces, is let in its entirety to Lloyds TSB Plc on a lease until 2021, off a low base rent of £24.50 per sq ft.

Ed Gamble, head of Investment in Jones Lang LaSalle’s Birmingham office, said: “This purchase provided IVG with a unique opportunity to acquire a prime asset on Brindleyplace, one of only two buildings outside the Brindleyplace Partnership, and was an ideal addition to our client’s portfolio.

“Whilst conditions remain tough it is not surprising transactional volumes in Birmingham have only reached £190?million at quarter three, a 15 per cent drop compared to the same period last year. Despite deteriorating conditions in debt markets such levels are still encouraging and this deal illustrates activity continues in Birmingham and overseas investors, particularly German Funds, are once again seeing good value in the city.

“Birmingham’s office leasing market looks on target for a record year of take-up, which combined with prime office yields in the city centre trading above the 10-year average level of six per cent, means overseas investors are looking to traditionally less volatile markets of Birmingham and regional centres.”

Jonathan Fear, director of office agency in Jones Lang LaSalle’s Birmingham office, said: “Over 1.2m sq ft of office space is under construction in Birmingham city centre. Of this 800,000 sq ft will be delivered in 2009, the equivalent of 4.3 per cent of existing stock, which will, in the short term, have an upward influence on vacancy rates. We anticipate tougher market conditions next year but, with a number of large requirements for office space still remaining, and much less space scheduled to complete beyond 2009, this will help keep Grade A availability down in the medium term, and as a result we do not anticipate falls in rents.”

Mr Gamble concluded: “As vendor pricing aspirations become more realistic we foresee opportunities for a range of investors, notably equity buyers, and this should make for some interesting transactions in Birmingham over the coming 18 months.”

CB Richard Ellis represented the vendor and the deal reflects a net initial yield of around 6.4 per cent.