Hines, in conjunction with the Ballymore Group, has agreed to jointly develop Two Snowhill, a 14-story office building in Birmingham, England. The Houston-based firm’s European Development Fund II has acquired the site from Ballymore and will fund the project, the cost of which was not disclosed.
The proposed 314,000-square-foot building will complement the adjacent One Snowhill, a 250,000-square-foot office completed by Ballymore in 2009 and sold to Commerz Real that November for £128 million (€142 million). The law firm of Wragge & Co has pre-leased 185,000 square feet of the planned building, which is looking to achieve a BREEAM Excellent rating for sustainability. Construction is scheduled to start in May, and the project is expected to be completed in early 2013.
Anthony Leonard, UK director for Hines, said in a statement: “We are optimistic about additional leasing prospects, as Two Snowhill will be of the highest quality and will be the first new office building to be delivered in central Birmingham for more than three years.”
The new development is Hines’ third project currently under construction in the UK. It follows 280 High Holborn in London’s Midtown, where construction started earlier this year, and Cannon Place in the City, which is expected to be completed this autumn.
The development of Two Snowhill technically is a re-start, as Ballymore had completed the two cores of the building in December 2008 before construction stalled the following month due to financial issues with the project’s lender, Anglo Irish Bank. Ballymore began looking to have the loan refinanced and was rumored to have lined up financing with Barclays, but ultimately the international development and investment company decided to repay the loan with proceeds from the sale of One Snowhill. Debt funding for Two Snowhill currently is being provided by Deutsche Hypo.
Founded in 1982 by Sean Mulryan, the Ballymore Group is one of the largest privately-owned developers specializing in large-scale, mixed-use schemes and the main force behind the £500 million Snowhill mixed-use development. When completed, Snowhill will consist of a mixture of Grade A office space, retail units, a hotel and residential apartments in four buildings.