Benson Elliot accelerates the pace in £1 bln “Reach for the Regions” (UK)

Benson Elliot, the UK-based private equity real estate fund manager, has invested close to £100 million (approx. €119.4 million) in regional towns in recent weeks, demonstrating its continuing confidence in the outlook for the UK real estate market outside of Central London. These new acquisitions take the value of its regional investment and development programme in the UK close to £1 billion (approx. €1.19 billion) The latest in a series of deals targeting regional UK real estate is 55 Princess Street, a Grade A office building in prime central Manchester, which the Fund has exchanged contracts to acquire.

The firm’s vote of confidence in Manchester reinforces the firm’s regional strategy, which guided the purchase of the Cambourne Business Park, Cambridge, in June of this year, and the more recent acquisition of the Fishergate Shopping Center in Preston. Fishergate is an in-town centre that dominates its local catchment, and offers the opportunity for the Fund to use its in-house retail asset management expertise to grow income and create long term value at a time when the still fragile occupier market is showing some positive signs of stabilizing.

Benson Elliot’s regional portfolio also includes the Station Hill redevelopment in Reading, acquired in 2010 in joint venture with Stanhope. Designs have been submitted for a five acre mixed-use scheme, which is due to be decided by Reading Borough Council later in the year. If Council approval is secured, construction of the first phase of the project is expected to commence in 2014.

55 Princess Street, Manchester

55 Princess Street is an off-market acquisition from LNC Property, of a recently developed class A office building in Manchester’s Central Business District. The Manchester market is one of the UK’s strongest regional office markets with an average annual take-up of over 900,000 ft² (approx. 83,612 m²) vs. class A vacancy below 3%. The Property was constructed in 2008 and provides 51,700 ft² (approx. 4,800 m²) of office space arranged over six above grade floors, and 4,100 ft² (approx. 380 m²) of ground floor retail space. The Property is 36% let and represents an opportunity for the Fund to implement a dynamic marketing and lease-up programme, bringing the building to full occupancy.

Cambourne Business Park, Cambridge

Cambourne Business Park was acquired by Benson Elliot in June 2013 from Aviva Investors. The property comprises three modern Grade A office buildings in an attractive business park close to Cambridge. With 40,000 ft² (approx. 3,716 m²) of Grade A availability (vs. over 1.5 million ft² (139,355 m²) of active demand), Cambridge is one of the UK’s strongest and most dynamic regional office markets. The properties are multi-let, high spec office buildings set in an attractive 7.6 acre landscaped area with 549 parking spaces, and offer the potential to grow value through an active asset management programme letting up vacant space and re-gearing existing leases.

Fishergate Shopping Centre, Preston

Benson Elliot acquired the Fishergate Shopping Center in August 2013 from Deloitte, as administrative receiver for Lloyds Banking Group. Anchoring the eastern end of Preston’s prime retail pitch, the Fishergate center is spread over 340,000 sf and offers a 750 space car park. It is currently let to a range of tenants, and strongly anchored by Debenhams, Primark, TK Maxx and Argos. The center offers a number of opportunities to enhance value, in particular by reconfiguring some of the existing space and potentially extending the existing retail footprint.

Source: Benson Elliot

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