A PROMINENT building along one of the city’s main shopping streets has been sold to a student housing developer for £3million with its upper floors to be converted into 40 flats.

Property consultants Vickery Holman said the sale of Tamar House, situated on the corner of Old Town Street and St Andrew’s cross roundabout, indicated that the Plymouth market was “improving”.

Bought by a private landlord, the ground floor houses RBS Bank, the Post Office and Skipton Building Society.

RBS also have the offices on the first floor, with the second and third floors vacant.

The new landlord’s agent confirmed that the first and second floors of the property could be used for student accommodation and possibly heightened to create more flats. The upper floors have planning consent for conversion to 40 student units.

Vickery Holman said the building currently produces a total gross income of £335,000 per annum in rent for the owner, with all the ground floor leases having “a couple” of years left to run.

Acting on behalf of Gervas Properties Limited, the property consultants sold the corner property for £3million which included a £200,000 discount for the vacant upper floors.

“We started marketing Tamar House during the recession, so we are delighted to have eventually got it over the line,” said director Mike Oldrieve.

“We believe this shows the improvement in the Plymouth market as the economy improves.

“The property is in a great location and, whilst the ground floor shop leases only have a few years to run, this location will always be in demand.”

Agent John Slade of Monk and Partners, representing the new owners, added: “This transaction demonstrates the current demand for student accommodation particularly in the city centre.

“Coupled with the strong retail tenants on the ground floor, this provides a solid property investment for our client.

“Furthermore, the property has potential to develop the first floor and to construct additional floors for further student provision.”

Henry Hutchings, chief executive of Clever Student Lets, said, the company was excited at the possibility of more “high quality student accommodation which further highlights the transformation and vibrancy of Plymouth’s city centre.”

The tenure is on leasehold for a term of 125 years from Plymouth City Council from the 24 September 1980.