Circle Property agrees 15-year office lease for Birmingham's Somerset House

Specialist regional UK property investment, development and management company Circle Property has agreed a new 15-year lease with BE Offices at its recently-completed Somerset House redevelopment on Temple Street in Birmingham city centre, it announced on Monday.

The AIM-traded firm said the agreement followed the recent letting of both ground floor restaurant units, and meant that the property was now at 100% occupancy, five months after the redevelopment completed.

BE Offices had agreed to take the entire 36,300 square feet of office space over six floors at the property.

The new letting increased Circle's contracted rent roll, as at 31 March, by 11.6%, and meant that the property would generate a total rental income of £1,231,479 per annum after rent frees and incentives expire, with upwards-only five year rent reviews

Circle Property acquired Somerset House in 2016 with the view of undertaking a full refurbishment of the property upon vacant possession, which was due four months after completion.

Since then, the company said it implemented a comprehensive refurbishment programme to modernise the building.

That included a successful planning application to change the use of the 10,956 square foot ground floor to restaurants, which led to Circle agreeing long leases with Latin American restaurant chain Las Iguanas, and with Camerons Brewery's 'The Head of Steam' pub concept.

“At Somerset House we saw an opportunity to apply our asset management expertise to this very well located but under invested and outdated office property,” said Circle CEO John Arnold.

“Our strategy was to create a high quality product, well placed to capitalise on tenant demand in Birmingham, while adding much needed leisure usage to Temple Street.”

Arnold pointed out that the company acquired, comprehensively redeveloped and fully leased the building in two years.

“Somerset House is a perfect case study for Circle's strategy, demonstrating our ability to generate income and value by identifying compelling investment opportunities in strong regional locations.”