Martley Capital has acquired The Lewis Building and the adjoining Priory Court in Birmingham city centre, adding a major grade‑A office and retail asset to its Regional Office (MCRO) fund platform.
A landmark site with long‑term income
The freehold purchase brings into Martley’s portfolio approximately 254,000 sq ft of workspace and retail accommodation. The complex, which for much of the 20th century housed the well‑known Lewis’s department store, was bought by Gulf Islamic Investments in 2019 for £140m and put on the market last year with a guide in excess of £73m.
The asset is supported by secure, long‑term income, including a government lease to the Ministry of Justice, and a weighted average unexpired lease term in excess of seven years. Existing occupiers include flexible workspace provider Regus and Freightliner among other corporate and retail tenants.
Purchase metrics and strategy
Martley said the price reflected a yield of 11.6% and represented roughly 50% of the replacement cost, which the firm characterised as an opportunistic entry into a strong regional market. The deal increases total deployment within the MCRO series to more than £110m.
| Metric | Detail |
|---|---|
| Building area | ~254,000 sq ft |
| Yield cited | 11.6% |
| MCRO platform deployment | > £110m |
Martley has outlined plans to actively manage the property, targeting lettings of vacant space, regearing of existing leases and capital works to improve amenities with the aim of lifting rental income over time.
“We continue to see value in the UK regional office market. Occupational markets are strengthening, prime rents are growing and the supply of high‑quality office space is becoming increasingly constrained,” said Rory Finnan, head of transactions at Martley.
Local market implications
For Birmingham, the transaction is notable for several reasons. It transfers ownership of a familiar city‑centre landmark to a domestic investor focused on regional office assets, underlining continued appetite for core urban stock despite a cautious national investment climate. The emphasis on active asset management suggests potential short‑ and medium‑term changes for tenants and users as Martley seeks to raise performance.
- Secures long‑term government rent through the Ministry of Justice lease
- Signals investor confidence in regional offices despite wider market caution
- May lead to refurbishments and new lettings in a constrained prime office supply environment
How quickly occupiers and visitors will notice changes depends on Martley’s immediate lettings and capital programme. For now, the purchase points to an active phase ahead for one of Birmingham’s most recognisable commercial properties.
