A huge office block in the centre of Plymouth has been bought by a property management company because its newly acquired freeport status is expected to bring a £100million economic boost to the city.
York-base North Star, which calls itself Yorkshire’s premier creative property asset management firm, has snapped up Old Tree Court, in Exeter Street and Bretonside.
The seven-storey pile is home to rented offices of the Department for Communities and Local Government, the JobCentre, and Woollcombe Yonge LLP solicitors.
There are three vacant floors, however, and the new owner is predicting that demand for these Grade A offices will rise now the city has been designated as one of the country’s eight freeports.
North Star said it is already in talks with potential new tenants and is working on a masterplan to regenerate the building and the area around it.
A spokesperson for North Star said: “We’ve been looking for exciting opportunities around the country for some time and this is a magnificent building in the heart of Plymouth that we also think we can add a lot of value to.Occupiers are now lined up for the remaining space and deals are currently in the legal process.
“We are currently in discussions with various new tenants as well as exploring the opportunity to further develop the building and its surrounding area. A masterplan for the regeneration of the property and surrounding area is underway.”
In his March Budget, Chancellor Rishi Sunak named Plymouth as one of eight new tax-break freeports, and plans are now being drawn for a “freezone” to include sites at Devonport’s South Yard, Langage Energy Zone and the as yet unbuilt Sherford Business Park next to the A38.
Estimates suggest the freezone could create more than 1,000 jobs in the first two years and up to 9,000 over the next decade, and than possibly more than 70 local businesses would benefit from the scheme, which is forecast to bring in more than £100million in investment over six years.
The North Star spokesperson added: “Obviously the recent announcement of freeport status for Plymouth also gives us massive confidence in the future of the city and this building.
“This means that different custom rules apply and Grade A office space like this building will be even more important in the expected jobs boom.”
North Star is a leading property developer and investor which has a portfolio of buildings and developments in York and Hull, and the acquisition of Old Tree Court is the first major deal the company has been involved in outside of the North. But it sees itself as a growing company and is looking to invest around the UK in residential and commercial projects.
North Star has not disclosed the purchase price for the building, but at 62,000sq ft it is almost three times the size of the largest office development on the market according to commercial property search engine Realla. That site says the highest price being asked for offices in the city is £2.5million, and the average price is £1.2million.
Old Tree Court has been purchased from Redefine Properties Ltd, a REIT (Real Estate Investment Trust) listed on the South African Stock Exchange, which has properties in about 30 cities in its homeland.
Clarion acted as legal adviser on behalf of North Star and the funding was arranged by Ice Cubed Property Finance, alongside Together.
Tom Frank, managing director of Ice Cubed Property Finance, said: “This deal demonstrates that whilst there are challenges in the market, when there are willing and committed buyers and lenders, funding can be successfully delivered.”
