Regional REIT has completed the sale of its Oakland House office building in Old Trafford, Manchester, to Legacie Developments for £13m, reflecting a net initial yield of approximately 5.1%.

Oakland House is a 15-storey, 161,500 sq ft office block on Talbot Road. The building is partly occupied by Greater Manchester Police and was around 35% vacant at the point of sale. The £13m transaction price is around £3m higher than Regional REIT’s acquisition cost in 2016 and represents a premium of about 1% to the asset’s 30 June book value. The property generates circa £700,000 in annual rental income with an average unexpired lease term of 1.7 years.

The sale supports Regional REIT’s ongoing strategy to reduce debt and recycle capital, with disposals completed so far this year now exceeding £50m and surpassing the company’s full-year target.

Legacie Developments plans to convert Oakland House and its adjoining 521-space car park into around 304 one- and two-bed apartments under a new “Horizon” brand. The project is backed by a £10m financing facility from lender Together.