A landmark office block is up for sale opposite the new Trinity Leeds shopping centre in what is seen as a key test of investor confidence in the city.
DTZ is marketing CGU House for £8.16m, which represents a net initial yield of 11.75 per cent, and claimed that early signs from potential investors are positive.
“It’s only been out for a week but so far it’s been well received with a number of local and national property companies looking at it,” said Tim Cameron-Jones, head of office at DTZ in Leeds.
He highlighted the “aesthetic improvement of the immediate environment” as Land Securities nears completion of its £350m project, the only major retail and leisure development to open in Western Europe this year.
Mr Cameron-Jones said the national reputation of Leeds is “absolutely huge in perception and PR terms” and while the immediate benefits for the office market are indirect the overall impression is of a city in the spotlight.
Trinity Leeds, which is 90 per cent pre-let, will open next month and will be followed by the Leeds Arena concert venue later in the year.
CGU House is fully let to Aviva until 2017. The insurer pays annual rent of £1m for the seven-storey building.
It was built in 1992.
DTZ said investors will be able to benefit from the transformation of Boar Lane, which had become rundown before work started on the Trinity Leeds development.
CGU House is currently owned by a group of private Irish investors.
The block was bought for around £14.5m in 2004, near the top of the property boom.
The lower asking price of £8.1m shows the extent to which real estate prices have fallen since the financial crisis.
The ensuing credit crunch has led to a fall in speculative development and a shortage of new grade-A office space in the city.
Mr Cameron-Jones predicted that the remaining stock will be fully let this year and raised concerns about that the economic impact this will have on the Leeds economy.
“If businesses cannot find somewhere to put staff and to grow it will constrain the performance of the city,” he said.
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