Guess Who? The U.K. Government Has Signed Yet Another Regional Office Deal With Legal & General
The U.K. government has committed to taking 240K SF at 3 Arena Central, Birmingham.
Legal & General forward-funded the development on behalf of its annuity fund, the latest in a string of signings between the institutional investor and the U.K. Government Property Unit.
The Birmingham deal, the largest in the city for a decade, will create a regional hub for government services, including the Midlands base for HMRC. It will be on a plot at the heart of the nine-acre city centre regeneration site.
“There is currently more capital committed to infrastructure projects in Birmingham than any other European city,” LGIM Real Assets Head of Annuity Transactions Adam Kerr said. “We believe that this latest investment will make a meaningful impact to the continued regeneration of this area, helping to create social and economic growth.”
The government has committed to a 25-year lease for the 14-floor building that has planning consent in place, and that will accommodate some 3,600 civil servants. Demolition and site clearance work are due to start imminently and the building will be handed over for fit-out in spring 2020.
Arena Central is being delivered by ACDL, a joint venture led by Miller Developments. It beat M&G/Ballymore’s Three Snowhill and Chatham Billingham’s Post & Mail sites to win the deal.
Legal & General already forward-funded Salmon Harvester Properties’ 3 Glass Wharf, Bristol, where HM Revenue and Customs signed up for 110K SF; is partners with Rightacres and Cardiff City Council on a 300K SF letting for HMRC, and is letting 270K SF to HMRC at Liverpool’s India Buildings.
The next Government Property Unit deal to watch will be in Manchester where decisions are due soon on a 350K SF HMRC letting. Four sites — First Street, New Bailey, Circle Squared and Noma — are on the short list.
CBRE and GVA are appointed as joint letting and investment agents to Arena Central.