In March 2011, the Fund acquired IQ Cambridge, an existing business park five miles north of Cambridge city centre. The Park was purchased from Segro Properties Ltd for £10.15m.
The Park consists of circa 78,000 sq ft of existing office buildings and 25.35 acres of undeveloped land. The existing buildings were constructed to a high standard in 2002 and consist of four offices buildings and an onsite cafe and conferencing facilities. The office accommodation is currently 78% let to 14 tenants including Horizon Discovery Ltd and Vaillant Limited. The offices are let on both standard (full repair and insuring) leases (approx 79%) and ‘easileases’ (approx 21%). Easileases offer fully managed office space on flexible terms with all-inclusive (of rates and service charge) rental. The easilease concept has proved attractive for start up organisations, which are central to the Cambridge economy. The property is yielding an average rent of £16.68 psf on standard leases and £34 psf on easileases.
The undeveloped land has planning consent for 330,000 sq ft of B1(a) and B1(b) office accommodation and a 112 bedroom hotel with conferencing facilities and associated parking.
The Cambridge office and industrial markets present compelling supply and demand dynamics. There is a shortage of Grade A industrial accommodation in the Cambridge area while office rents are robust and take up has been consistent.
The Fund’s business plan involves actively managing the existing office accommodation and introducing a change of vision for the Park which will involve looking to offer consented development land to owner occupiers.
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