CEG looks to sell multi-let Birmingham tower

Commercial Estates Group has brought its long leasehold interest in Alpha Birmingham to market for £38.8m, which reflects a yield of 9.98%. Currently 83% let to 25 tenants, the 28-storey asset brings in a rental income of just over £4.1m per annum and has a reversionary yield of approximately 14%. The building’s five biggest tenants include TravelPerk and Electronic Arts, which together account for roughly 20% of the building’s income, as well as Systra, the NHS and Hitachi. With six lease or break options approaching on 37,137 sq ft over the next year and the average rent on unfitted space in the building at just over £21 per sq ft, the asset is being marketed as an opportunity to increase income through re-gears or new leases. Birmingham City Council owns the freehold interest in the building and granted the leasehold in July 2007 for 250 years. Around 81% of the workspace in the building has been refurbished since Anglo-Scandinavian Estates, advised by CEG, acquired the building in 2014 for £14m. Savills has been instructed to market the asset.