Fund manager Close Investments has sold the long-leasehold interest in City Square, Liverpool, to London & Capital for around £49m.

The 148,000 sq ft (13,700 sq m) office building was developed by Shepborough, a joint venture between Shepherd Developments and Scarborough, and completed in July 2005. The deal reflects an initial yield of 4.6%.

The property is let to two government tenants - the Department of Constitutional Affairs and the Department for Communities and Local Government - at rents of between £16.50/sq ft (£177.61/sq m) and £17.50/sq ft (£189.37/sq m).

Iain Keys, director of real estate at London & Capital, said: ‘This is a significant purchase for our public sector real estate fund and reflects our commitment to acquiring top quality assets with long leases in locations which should see continued rental and capital growth.’

King Sturge advised Close Investments.