The RO is pleased to announce the sale of its remaining interests at Newhall Square in Birmingham for £1.85 million to Marchmont Farms Ltd. The property is located on the southern fringe of the Jewellery Quarter and fronts the busy Charlotte Street, between the Travelodge and the Stay City hotel schemes, both of which were developed and subsequently sold by the RO for a total consideration of £27 million.
The sale of 6‐7 Newhall Square ends RO’s involvement and current investment in the heart of Birmingham, which has lasted over 12 years during which time the City centre and Jewellery Quarters have been transformed. The site is located close to the new £1 billion Paradise development, one of the largest schemes in the UK that will deliver 1.8 million sq. ft. of new office, retail and leisure space.
RO’s involvement in Birmingham can be broken down into three distinct phases and exemplifies the Group’s business philosophy. Phase one started back in 2004, when the RO entered into a joint venture with local development company St Bernards, who had been chosen by Birmingham City Council to redevelop the former Birmingham Science Museum. The RO partnered with them to provide funding, development and project management expertise.
The joint venture, RO St Bernards Ltd, secured planning consent for 234 apartments, 53,820 sq.ft. of commercial space and 247 car parking spaces and subsequently agreed terms for a pre‐let with Travelodge Limited for a 100 bed hotel, as well as two speculative refurbished listed buildings totalling 9,471 sq ft and a speculative new build 10,326 sq ft office building at 6‐7 Newhall Square, which at the time of completion was the most energy efficient office building in Birmingham.
In addition to Travelodge other phase one tenants included the NSPCC, Co‐Operative Group Limited, Ormiston Academies and architects, Glancy Nicholls. The Travelodge investment was sold in 2009 to Aprirose for £6 million.
The second phase, which comprised 234 apartments, was put on hold following the financial crisis of 2007. Once markets improved, the RO entered into phase three, agreeing in 2012 terms for a pre‐let with aparthotel operator Stay City for 170 serviced apartments. Practical completion was achieved in January 2016 and the investment was sold to KFM Long Income Property Unit Trust (Knight Frank Investors) for a total consideration of almost £21 million in June 2016.
David Kershaw, General Manager, RO Real Estate commented:
"Our investment in Birmingham’s Jewellery Quarter can be seen as an excellent example of the Group’s overall approach to business. We worked hard to overcome challenges, finding solutions and eventually developing impressive assets right in the heart of the City. The assets were attractive to a number of institutional and private buyers and made available for sale at a time when the immediate locale had been substantially improved and ultimately ended in successful exits for the Group."
RO St Bernards Ltd was advised by Dentons UKMEA LLP and Marchmont Farms Ltd by Trowers & Hamlins. The respective agents were Allsop LLP and Granby Martin.