Brixton plc has annouced that it has simultaneously exchanged and completed on the purchase of two assets from Legal & General in its core markets of Greenford/Park Royal and Heathrow. The purchase consideration is not being disclosed at this stage but the vendor's asking prices were £35 million (aprox. 48 million) for Greenford and £37.55 million (aprox. 51,75 million) for Heathrow International.
Rockware Avenue, Greenford comprises a 17.2 acre site with older style distribution warehouse buildings totalling approximately 488,000 sq ft let to Nair Properties Limited (part of Wincanton plc) for an unexpired term of 67 years. The passing rent is just over £1.5m per annum and is subject to 5 yearly upward only rent reviews, the next due to occur in July 2010. The property is directly opposite the entrance to Brixton's major Greenford Park development.
Heathrow International Trading Estate is an 18 unit holding totalling around 190,000 sq ft let at a current rent of just under £2m per annum. The estate is located between Brixton's Heathrow Big Box Fund's Heathrow Corporate Park and its wholly owned Heathrow Causeway and the Heathrow Estate. Built in the late 1970s Heathrow International comprises approximately 12 acres and tenants include Deutsche Post, DHL, Rolls Royce, Office Depot and Flights Hallmark. At present around 20% of the estate is vacant by area with expiries
approaching another 30% by area by the end of 2008.
This is the ninth purchase since Brixton sold approximately 25% of its portfolio - essentially its secondary non-core holdings - in May 2006 and brings the capital commitment on these acquisitions to well in excess of £200m. The Company also has a further £100m of capital expenditure within its development programme in 2007.
Brixton were advised by King Sturge with M3 acting for Legal & General.
Brixton's Chief Executive, Tim Wheeler, commented:
"These acquisitions are entirely consistent with the strategy we outlined 12 months ago. The majority of our purchases since then have been from institutions whom we indicated could potentially become sellers. Both these opportunities provide excellent medium term development opportunities allied to shorter term income. There is a definite polarisation of pricing with secondary markets away from London likely to suffer as over supply increases and debt driven buyers effectively unable to purchase. In and around London there have been some significant recent investment deals setting a new pricing benchmark and reflecting the current attractions of the London market - notably good demand and a shortage of new development. Given competitive sensitivity at the present time no announcement on the specific pricing of these assets is being made."