In a significant real estate move, the UK headquarters of the telecommunications behemoth, BT, located in Leeds, has been purchased by a Citigroup subsidiary and a private investor for a sum of £38.5 million. The prominent One Sovereign Street building, spanning eight storeys in the heart of the city, had been up for sale since June, with an initial asking price of £40 million.

The property, which covers an expansive 139,079 sqft, was specifically constructed for BT’s operations. Currently, BT is the sole occupant of this triangular structure, leasing it at a rate of £19.50 per sqft. This is notably lower than the prevailing prime rents in Leeds, which stand at £36 per sqft as per Allsop’s data. With BT’s lease set to continue for another 12 years, there are rent reviews linked to the Retail Price Index (RPI) scheduled for 2025 and 2030. Additionally, there’s potential for increasing the rental value through strategic refurbishments.

Dale Johnstone, a partner at Allsop, commented on the current market dynamics, highlighting the keen interest from overseas investors in acquiring top-tier, institutional-grade assets at prices considerably lower than historical averages. He mentioned the proactive stance of their clientele, many of whom are exploring all-equity deals, considering the addition of debt components later, contingent on the decline of borrowing rates.

This acquisition is in line with Allsop’s recent initiatives, which include the expansion of its commercial investment team in Northern England.