Mitchells & Butlers headquarters and hotel sold for £69.5m
The headquarters of pub firm Mitchells & Butlers in Birmingham and the nearby ibis Styles hotel have been sold for £69.5m.
Legal & General Property has acquired the freehold interest of the offices on Fleet Street and the associated hotel on Lionel Street from LaSalle Investment Management.
The building was bought by Legal & General on behalf of its LPI (Limited Price Inflation) Income Property Fund, reflecting a net initial yield of 3.94%.
LaSalle Investment Management made £18.5m profit in 17 months having acquired the buildings for £51m in February 2014, according to the Birmingham Post.
Purpose-built for Mitchells & Butlers in 2003, the grade-A office building is let on a 35-year contract dating from January 2009. The 120-bedroom ibis Styles hotel, which also forms part of the deal, was rebranded and refurbished in 2014.
Derek Gilby, senior fund manager for Legal & General Property, said: "The first major regional city centre office asset for the fund, we believe that Birmingham is set to benefit from a number of significant infrastructure projects already underway and the asset is well positioned to gain from the regeneration of the adjacent Paradise area which is undergoing a rapid transformation.
"Mitchells & Butlers offers the fund a strong tenant covenant, providing secure, inflation-proofed income over a long lease term, yet with the benefit of market rental upside."
JLL acted for LaSalle Investment Management on the deal, while CBRE advised Legal & General Property.
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