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Birmingham will be one of the top cities to recover from the coronavirus pandemic, and Aviva Investors wants to buy a slice of the action.
So said the company, which is understood to have missed out on the chance to buy Nuveen’s 55 Colmore Row, but said it is still very much in the Birmingham office market to buy.
Germany’s Union Investments beat other bidders to take the 157K SF trophy office building in October 2020 in a deal valued at more than £105M. CoStar reported a yield of 4.5%.
The building houses WeWork’s 55K SF sole outlet in Birmingham.
“55 Colmore Row was the kind of asset we really like, we spent a lot of time analysing it, but maybe the buyers made more bullish assumptions than we did, so we didn’t get it,” Aviva Investors Head of UK Real Estate Research Jonathan Bayfield said.
Bayfield added constraints in the Birmingham market limited its buying opportunities.
“Birmingham is a relatively small market with a tight prime pitch for us to go at, which means less investment opportunities, and we are disciplined buyers, we don’t just buy anything,” he said.
Bayfield said Aviva had invested “heavily” in its 84K SF block at One Temple Row. It now boasts the largest roof terrace in the city.
“Birmingham will be one of the top cities coming out of COVID and medium-to-long-term it is the type of economy that is well placed to grow,” Bayfield said.
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