Property agent Jones has sold Hammerson's stake in one of the UK's top retail developments, 140-145 New Street in Birmingham.
The £10.35 million deal, at a net initial yield of 4.6 per cent, sees Hammerson's share of the long leasehold on the building transfer to M&F Finance, while LAMIT retains the majority share of the free-hold. Located adjacent to the Bull Ring, 140-145 New Street comprises four retail units let to Adidas, Schuh, RBS and Jade Shoes.
The long lease hold represents around a 35 per cent share in the total value of the property and the sale represented a rare opportunity for investors to acquire an asset on New Street.
Ed Gamble, from the investment team at Jones Lang LaSalle Birmingham, said: "This is one of the most sought after retail locations in the country, and is Birmingham's equivalent of London's Piccadilly Circus. This was reflected in the significant interest we saw in the property and despite the complex tenure on offer, the price we achieved was substantially higher than the original asking price.
"The deal reflects the continuing appetite for Birmingham retail investment properties which looks set to continue with the success of the Bullring."
Prior to the sale, Hammerson had refurbished the building and it was let to its current tenants by Jones Lang LaSalle's retail team.
Carolyn Kenney from Hammerson also said: "We have achieved considerable capital growth from this asset over the past two years and have developed it to ensure that the future lease holder can maximise the potential of its prime location. However, as a single asset it is no longer a good fit with our wider portfolio."
Eversheds represented the vendor in the transaction.
David Jones, from Eversheds' Birmingham office, said: "This was a great deal for all the parties involved. We've worked with Hammerson for some time on this project: regearing the headlease, closing the arcade that ran through the middle of the building, obtaining vacation possession, redeveloping it for residential and retail use, completing the new retail lettings and, finally, the investment sale.
"It's fantastic to see another worn out building in the city core reinvigorated."