Property investment company Palace Capital announced on Tuesday that it has exchanged contracts to acquire the freehold of Boulton House, on Chorlton Street in Manchester, for a consideration of £10.95m.
The AIM-traded firm said this is potentially subject to a downward adjustment of up to £0.4m for rent guarantees and other costs.
Completion of the deal is expected on 30 September, with the acquisition being funded by a new debt facility from one of Palace’s existing lenders, with credit committee approval already received.
Palace Capital’s board described Boulton House as a 75,000 sq ft multi-let 1970s office building in the centre of Manchester, in the popular Portland Street corridor.
It sits within the Midtown district within a few minutes’ walk of Piccadilly Station, in an area where “considerable regeneration” is underway.
Palace Capital said it views Boulton House as a medium term development opportunity.
“This acquisition continues our strategy of purchasing assets in growth locations,” said chief executive Neil Sinclair.
“We have been interested in Manchester for some time but up until now we were not able to secure a property which fulfilled our acquisitions criteria and rental return.”
Sinclair said the board believes Boulton House will respond to its brand of asset management to maximise the value of the property.
“Initially this will be achieved by letting the vacant space whilst in the medium term there is considerable development potential,” he explained.