Developer plans new Sheffield office after block sells for £24m

3 St Paul’s Place was snapped up by London-based investment company M&G Real Estate.

Developers U+I and CTP hailed the sale “as a massive vote of confidence in the city of Sheffield.”

David Topham, director of Manchester-based CTP commented: “We are tremendously proud of what we have achieved at 3 St Paul’s Place. It is the first speculative office building to be developed in Sheffield since the recession and now boasts a number of high-quality occupiers.”

3 St Paul’s - the final element of the £200m Heart of the City project - was paid for by a ‘basket’ of lenders, including a £6.8m loan of public money.

The Star understands all loans will be repaid and the sale of the building returned a profit. It means CTP now plans to forge ahead with 4 St Paul’s, another Grade ‘A’ office block, on an unconfirmed site nearby.

Mr Topham added: “The Council has not invested any cash at all in St Paul’s Place including Office 3. The majority of the scheme was undertaken at arm’s length with private sector capital.

“Where the council invested it was in public realm of the Peace Gardens and the Winter Gardens enabling us to conceive and deliver St Paul’s Place as a new and fantastic business location for the city.

“Following the recession the usual funding models were not working and the council supported the delivery of Office 3 in the form of their covenant, or guarantee, sitting behind the finance, but it was never required to invest cash. So there has been non repaid.

“By using the council’s strong covenant to support the funding, CTP and U+I could raise the necessary funding from the SCR Jessica Fund and Barclays Bank to develop 3 St Paul’s Place. The strategy always was that we would let the building then sell the building to the institutional market and the sale last week to M&G Real Estate achieved this objective.

“We are very grateful to all our funders and investors, who backed our plans in the recession when development finance was scarce. They believed in us and we are delighted to have repaid that faith.”

Occupiers at 3 St Paul’s Place include civil engineers Arup, architects BDP and HLM, Swedish bank Handelsbanken and lawyers Freeths. Tes Global and HLM architects are also mulling a move.