Location: Camberley, Surrey
Description: Business park
Size: 156,500 sq ft (14,500 sq m)
Strategy: Problematic Situation
The Meadows Business Park is the third acquisition on behalf of the fund. It is a “best in class” modern office asset well located close to Junction 4 of the M3 motorway and in front of Blackwater train station. It comprises 4 office buildings, which are 80% let to 7 tenants including City Link Ltd, Kendle International Ltd and the British Cement Association. The buildings benefit from high specification and an excellent car parking ratio (1 for 227 sq.ft.). There is an element of storage accommodation in each building at roof level, which is demised separately to each tenant.
The property was developed in 2002 by Helical Bar and has been purchased at £23.476 million which equates to a low capital value of £150.17 psf. This is significantly below replacement cost which has been valued for insurance purpose at close to £35 million or £223 psf.
The buildings are strongly income producing but do present active asset management opportunities meaning that the performance is not reliant on yield compression. Hence the entry yield of 7.30% (on a triple net basis) compares favorably to an assumed exit yield of 7.50%.
The fund’s business plan is to capitalise on the scarcity of quality office space in the Blackwater Valley and pursue an intensive letting strategy in order to let up the vacant space despite challenging occupational market conditions. Proactive asset management will include initiatives such as the creation of a cafeteria (1,260 sq.ft.) in order to offer additional facilities on site.
