Birmingham’s The Cube goes on the market
One of the city’s highest profile pieces of real estate could soon be in new hands after the current owners decided to put it on the market.
The Cube has gone from the lows of administration to becoming one of the property success stories of recent years and offers are now being sought by Savills that will bring to a close a remarkable jouney for the Ken Shuttleworth-designed landmark.
The building was originally the brainchild of Alan Chatham’s Birmingham Development Company which was planned to complement the successful mixed-use Mailbox scheme that is currently the home of the BBC and Harvey Nicholls and was bought by Brockton last year for £127.1 million.
BDC brought in Mr Shuttleworth and his Make practice to design the building and its complexity and the challenging canalside site saw BDC create their own main contractor – BuildAbility – to build out the project.
However, the build programme coincided with the credit crunch and the collapse of commercial property prices and the project’s backers Lloyds, who lent around £92 million to BDC for the project, called in PwC as administrators after claiming it had lost confidence in some of the management.
The freehold for the building was tranferred from BDC to a subsidiary vehicle Aruna Project which was headed up by former BDC director and shareholder Neil Edginton while Mr Chatham and his partner Mark Billingham severed all ties with the project.
Since the building – which includes 244 apartments as well as significant commercial, retail and leisure space – was delivered it has gone from strength to strength.
One of the first deals to be done saw Sanguine pay a rumoured £8 million for the long lease to develop a Marco Pierre White rooftop restaurant, a Hotel Indigo below and a club and spa on the ground floor.
The building has also attracted a Brazilian restaurant and a celebrity hairdresser with just half a dozen units remaining while the commercial space is now almost full having secured the Highways Agency while the building was still being built and snatching a major Law Society letting from under the noses of rival properties in the city last year.
Three quarters of the apartments have now been sold but the process has not been without its problems as some investors who bought off plan initially refused to complete, claiming the delay in delivering the scheme meant they could no longer raise the finance because of a fall in residential values.
However, the High Court found in favour of the developers and said that the project had actually been delivered within a reasonable timeframe and many have since completed.
In terms of the ownership of the buildings, while it is still technically in administration, the debt was sold by Lloyds earlier this year to Loanstar for an unknown amount although rumoured to be for around £60 million as the publically-owned bank looked to reduce its property liabilities.
It is believed that Loanstar are now looking to realise some or all of their asset and Savills has been instructed to market the building via the administrators.
It is believed that Loanstar are initially looking for offers of around £40 million for the commercial space.
The firm is also open to offers to take the entire building including the residential, the remaining of which is valued at around £20 million with the apartments currently achieving around £300 per sq ft.
Neil Edginton, who has been behind many of the deals over the past two years, said that despite the challenges, he believes the project has finally delivered everything it intended.
He said: “Delivering The Cube for Birmingham has genuinely been a very proud time and the building has already positioned itself as the place to be seen in the city.
“We have worked hard over the past couple of years, to bring new names to Birmingham in a truly unique mixed use building with tenants including Marco Pierre White, Hotel Indigo, Rodizio Rico, Adee Phelan and theclub&spa.”
PwC partner Matthew Hammond, who has led the administration from Birmingham, said the time was right to bring the scheme to market.
He said: “The commercial element of the building is 90 per cent full now and despite the difficult economic climate, demand from investors for trophy assets like the Cube remains very strong. We have therefore decided to allow the market a brief opportunity to look at the Cube and initial interest has been extremely encouraging.”
New research published last week showed the region’s commercial property sector continued to tread water in the first half of the year.
A report by international property adviser BNP Paribas Real Estate showed that office occupancy across the West Midlands remained stable, with Birmingham City Centre space costing around £42 per square foot.
With thanks to Alun Thorne, Birmingham Post