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London property manager acquires major Newcastle city centre office space for £40m

The Wellbar Central office scheme on Gallowgate, Newcastle, has been acquired for £40m.

Orchard Street Investment Management, a London-based property investment company, has bought the site from an unnamed client of BNP Paribas Real Estate.

Global property and real estate consultants Cushman and Wakefield, supported the new buyers, whilst real estate firm BNP acted for the vendor.

The Grade-A office development, which derives 40% of its rental income from Sky UK, also houses firms such as Global Radio, Irwin Mitchell and DAC Beachcroft.

Built in 2010, the 117,679 sq ft spans over 10 storeys, with rent ranging from £19 to £21.50 per sq ft.

Research from BNP Paribas has found that investment volumes at Newcastle offices hit £170m in 2015, up 71% on 2014 and far above the five-year annual average of £57m, as the city benefited from investor appetite for regional office stock.

Aidan Baker, Director in BNP Paribas Real Estate’s Newcastle office, said: “Grade-A office supply in Newcastle has diminished significantly over the past five years to just over 100,000 sq ft. Coupled with the limited development pipeline, this should have a further positive impact on headline rents.”

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