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Case Study

Leeds sees the largest ever speculative funding deal

During 2014, M&G Real Estate agreed to forward-fund the Central Square office scheme in Leeds city centre, which is being developed by Roydhouse Properties who acquired the site the previous year.

JLL successfully introduced M&G to this opportunity – this is the largest ever speculative funding deal in Leeds.  The scheme has a gross development value of £96 million, and will deliver 10 floors of speculative office accommodation totalling approximately 208,000 sq ft, retail, cafes, restaurants and 128 car parking spaces.  Winter Garden Entrance Daytime Email compressed.jpg

This was a complex deal – being a substantial lot size – and one of the largest speculative regional office funding deals in the UK last year. The transaction also reflected the complexities associated with structuring a funding transaction of this size (200,000 sq ft+) in a market recovering from the recession, and based on a new model which would work for the developer and the fund going forward.

PwC is to become the anchor tenant, signing for circa 55,000 sq ft on the seventh and eighth floors with plans to relocate by summer 2016. Negotiations were complex and ongoing for some time, therefore the completion of this pre-let is both a vote of confidence in the developer and in Leeds rents.

Central Square is the first speculative office development to be institutionally funded in Leeds, post-recession. The scheme is on site and is making good progress in line with expectations, with completion anticipated in May 2016.

This transaction was recently voted Property Deal of the Year at the Yorkshire Property Awards 2015.

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