An Irish investor has paid £12.5 million sterling for an office investment at Old Trafford, in Manchester, in a deal which will give him a yield of just under 8 per cent. The 84,000 sq ft office block at 97 Talbot Street was recently let to Centrica plc (previously known as British Gas) for a term of 15 years. The company is to upgrade the block to provide a call centre and headquarters for its operations in the north-west of England. The building is just over a mile from the M60 and Manchester city centre.

Centrica will be paying an initial rent of £12.50 per sq ft. However, with prime office rents in the city now moving to £22 per sq ft, the investment should show good rental growth on review, said Niall Gaffney of Harrington Bannon, who acted for the purchaser.

He said that despite the obvious differential and recent upward movement in UK interest rates, the Centrica investment was indicative of the quality of well-secured investments that are still available in the UK by comparison with the often overpriced and increasingly scarce investment opportunities in Ireland.