Southampton City Council buys £25m office

Published 07th Apr 2010

Southampton City Council has bought a £25m office development it is set to occupy in the summer.

The council has bought One Guildhall Square, next to Southampton’s Civic Centre, from Hodge Investments (Southampton), an associate company of property lender Julian Hodge Bank.

It has bought the property at a net initial yield of 5.7%.

The property, expected to reach practical completion in the summer, is a six-storey, 72,747 sq office scheme pre-let to Capita Business Services and the city council.

Rents average just under £20/sq ft and Capita and the council have agreed to occupy the building on 12 and 40 year leases respectively.

Craig Barton, investment director at DTZ who advised Julian Hodge Bank, said: “We fully understand the rationale for the council acquiring the building amidst strong UK and foreign investor competition, as it provides them control over their own accommodation and with a valuable investment asset saving them £3.5m over the next 40 years.”

Source: ' Property Week '

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