Town Centre Securities to buy The Cube in Leeds for £12m

Town Centre Securities has exchanged contracts with Aviva for the acquisition of The Cube in Leeds for £12m.

The property investment, development and car parking company said on Tuesday that the purchase will be funded from its existing cash resources and planned disposals.

Located opposite the Merrion Centre, TCS's largest asset, The Cube is a refurbished and extended former 1960s office building, comprising of 22,000 sqft of ground floor leisure units with leases to Hard Rock Cafe and Mecca Bingo, together with 50,000 sqft of offices over three floors let to Capita and the government.

It also includes the freehold for 84 apartments which are leased to Persimmon Homes at a peppercorn rent.

The purchase price represents an initial yield of over 12.5% on the passing income. With lease expiries in 2019 and 2020, the yield will reduce to around 9%, which TCS said is "a strong and sustainable return for a city-centre asset".

Chairman and chief executive Edward Ziff said: "The Cube represents a strategic acquisition for TCS, as we further expand our ownership in Leeds, with its proximity to the Merrion and other key destinations in the City Centre. It will provide us with asset management opportunities and importantly the additional income will help mitigate the effect of further asset sales that we plan from our portfolio.

"This transaction demonstrates our ambitious growth plans, and the momentum that we are building with both our exciting development pipeline and strategic acquisitions such as The Cube and Ducie House, in our Piccadilly Basin development."