Largest office scheme in Derby comes to market

Posted on by John Cronin

A large, multi-let office scheme in Derby city centre has been put up for sale with an asking price of £11m.

Heritage GateThe Heritage Gate scheme (pictured) is a 3-building development used as multi-let office accommodation. Total floor space amounts to approximately 140,000 sq ft and the development is considered to be the largest, city centre Derby office scheme. The development also includes 7 retail units and generous car-parking space.

Originally constructed in the 1970s for the city council, the offices are now multi-let. The 3 buildings that make up Heritage Gate are called Celtic House, Norman House and Saxon House. Derby Council is the principal tenant, occupying some 70% of Heritage Gate on a lease that expires in December, 2013. The other significant tenant is law firm Smith Partnership, occupying approximately 10% of the floor space.

Typical agreed rental prices for office suites are in the range £8 / sq ft to £10 / sq ft. At the asking price of £11m the rental income would give a yield of 12.30%. The scheme is being marketed on the assumption that new owners will undertake a refurbishment programme and develop an empty piece of land included in the sale.

Nick Hosking, director of joint marketing agent Innes England said: “For the last two decades Heritage Gate has been without question the most successful multi-let office complex within the city. The scheme has performed well because it offers good-quality flexible accommodation in a range of sizes and crucially benefits from a very high on-site car parking ratio complemented by secure basement parking.”

Heritage Gate is currently owned by Aviva Life and Pensions. Aviva had previously proposed to demolish Celtic House and Saxon House and replace the buildings with 2 new commercial developments (.pdf link).

The other joint agent for the scheme is GVA.

 

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