Less than six months after planning was granted for the redevelopment of the nine-screen cinema at the Arcadian Centre in the heart of Birmingham's china town, Gallan Properties has clinched a #12.9 million deal to sell the 80 units off-plan to Irish investment company Cornerstone Property.
The deal, which took just 14 days, has already achieved a profit for Cornerstone's owner, Ray Bolger, with over 50 of the properties sold on to its established Irish investors. The scheme is expected to be sold out by mid-September.
Offering prospective purchasers a guaranteed six per cent yield over ten years, Cornerstone is working with Stay City to offer units as serviced apartments.
The redevelopment of the Arcadian site is Gallan's first major residential venture in Birmingham.
On the corner of Bromsgrove Street and Hurst Street, work started this month and includes two further storeys to create 80 loft-style luxury apartments totalling 50,000sq ft.
The internal cinema space will be stripped out to make way for a residential development, together with a retail unit or restaurant extending to 4,000 sq ft to the front facing the Arcadian's piazza 200-plus car parking spaces.
Mr Bolger said yesterday: "You'll always attract investors if you can offer the right product and being in such a strong location means we can offer investors the added guarantee of secured yields.
"Galllan Properties' approach to the deal has been refreshing. They are a professional team not driven by huge overheads and unrealistic profit margins and they understand the marketplace."
Well known for attracting Irish investors, Mr Bolger identified the city two-and-a-half years ago as an up and coming commercial centre and has invested in 400 plus apartments.
"We still see a lot of potential," he said. "But our biggest issue at present is sourcing stock as many schemes are overpriced to achieve the return necessary to attract investors.
"There is still a move towards living in the city and the rental market is very strong with the age of first time buyers being pushed up towards thirty plus.
"In the next twelve months we'll be looking at new emerging areas in the Jewellery and Gun Quarter. Here, price points should be more realistic so we can achieve all important yields."
Karen Wilson, director of Birmingham-based Gallan Properties, added: "The Arcadian helps put us on the map in Birmingham and is one of a number of projects live across the UK involving both commercial and residential schemes.
"Our flexible approach and ability to react to opportunities has enabled us to work successfully with investors such as Cornerstone Property to help build a sound portfolio of #30 million."
Set up in 1994, Gallan Properties is a family-led operation headed by Jackie Gallagher with son, Marty Gallagher and daugther, Karen. It has an extensive investment portfolio ranging from offices and warehousing to major residential and mixed used schemes.