The headquarters of pub chain Mitchells & Butlers in Birmingham have been bought for £69.5 million - giving its owner an £18.5m profit in just 17 months.
The freehold interest of the offices and an associated hotel, in Fleet Street and Lionel Street respectively, has been acquired by Legal & General Property from LaSalle Investment Management.
Legal & General Property bought the building on behalf of its LPI (Limited Price Inflation) Income Property Fund, reflecting a net initial yield of 3.94 per cent.
LaSalle Investment Management for £51 million.
The grade A office building was purpose-built for M&B in 2003, covers 95,000 sq ft and has a 278-space basement car park over three levels.
It is let in its entirety to M&B for 35 years from January 2009 with RPI-linked rental increases.
The deal also included the 120-bedroom Ibis Styles Hotel which was rebranded and refurbished in 2014.
Derek Gilby, senior fund manager for Legal & General Property, said: "The first major regional city centre office asset for the fund, we believe that Birmingham is set to benefit from a number of significant infrastructure projects already under way and the asset is well positioned to gain from the regeneration of the adjacent Paradise area which is undergoing a rapid transformation.
"Mitchells & Butlers offers the fund a strong tenant covenant, providing secure, inflation-proofed income over a long lease term, yet with the benefit of market rental upside."
JLL acted for LaSalle Investment Management on the deal while CBRE advised Legal & General Property.
