Benson Elliot, the UK-based private equity real estate fund manager, has sold CBXII in Milton Keynes to Blackrock for £35 million (€44.7 mln), reflecting a net initial yield of 7.0%.
CBXII, a 150,000 ft² (13.935 m²) mixed-use office and retail scheme, is prominently located on Midsummer Boulevard, within the Central Milton Keynes Business District.
The property was acquired by Benson Elliot Real Estate Partners II, L.P. (the “Fund”) in 2010, with a view to upgrading the quality of the office accommodation, improving tenant mix and covenant strength and increasing rental levels. CBX II is split over three buildings on Midsummer Boulevard: Midsummer East, Midsummer West and Midsummer Court.
Benson Elliot has accumulated over £1 billion (€1.2 billion) in UK regional office and retail investments since the acquisition of CBX II, as part of its “Reach for the Regions” programme.
Commenting last year on the firm’s UK investment activities, Marc Mogull, Benson Elliot Managing Partner explained that, “The spread between prime London yields and the best of the rest was getting too wide to be justified by fundamentals. People sometimes forget how little new stock has been delivered outside London over the past few years.”
At CBXII, Benson Elliot managed a £4.2 million (€5.3 million) refurbishment programme, fully modernising all office accommodation in the building, creating new retail space and improving reception and common areas. The property has benefited post-refurbishment from the growing demand for high quality regional office accommodation, and is today 80% let.
James Jakeman, Benson Elliot Principal, said: “CBXII was Benson Elliot’s first UK investment, and it’s been a great success for our investors. The asset’s performance has validated our thesis of buying into an expected return of tenant demand in the regions, creating the kind of high quality product that would be attractive to leading UK investors. Having transitioned the asset back to core, the time is right to release the value created.”
Source: Benson Elliot