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Deka buys £164m Manchester asset at the second attempt

The Frankfurt-based asset manager has purchased one of Manchester’s prime office and retail assets, just over a year after a £130m deal for the same property fell through. 

German real estate fund manager Deka Immobilien has acquired One St Peter’s Square in Manchester for £164 million ($211.8 million; €189.6 million).

The 288,000 square foot Grade A office and retail property, which was built on the site of the former Elisabeth House building, is located in the heart of the city and in close proximity to the town hall and Central Library. The building is currently multi-let with a weighted average unexpired lease term of approximately 16 years with current tenants including KPMG, DLA Piper, Addleshaw Goddard and Mazars.

The seller was a joint venture between UK property developer Argent and pension manager The Greater Manchester Pension Fund (GMPF). Construction of the building began in 2011 and was completed in late 2014 for around £60 million. The asset was reportedly almost sold last summer to Deka for around £130 million, however the deal was iced for undisclosed reasons.

Councillor Kieran Quinn, chairman of GMPF said: “The Fund has made the returns required to deliver the pensions promised to its members, and delivered a landmark building for Manchester city centre. This building which, when started, was the only new construction in the city centre. It has since acted as a catalyst for the development of the area with the new tram site and significant improvement to the public realm.”

The deal is the second acquisition in the UK regions in the last four months for Deka. In April, the firm bought the Atria buildings in Edinburgh’s financial district for £105.3m.

In another one of its most recent deals, Deka bought the Mac 567 office complex in Milan for approximately €115 million from UK private equity fund manager Doughty Hanson & Co.

For the One St Peter’s Square transaction, Deka was advised by Savills and CBRE, while the joint venture was instructed by Bilfinger GVA.