Tuesday, 25 November 2014
Clearbell targets to build a €126 mln office portfolio (UK)
Clearbell, the private equity real estate fund management business, has marked the launch of its south-east focussed office portfolio with the £13.5 mln (€17 mln) purchase of a 106,200 ft² (9.847 m²) office complex in Crawley, Sussex, close to Gatwick Airport. Clearbell is committing £50 mln (€63 mln) of equity to the overall portfolio which, with a loan-to-value ratio of 50%, would create £100 mln (€126 mln) of acquisition firepower.
The new platform is targeting offices predominantly in south-east locations with strong transportation links diminishing supply and strong economic growth. Clearbell is targeting office assets, which typically require significant asset management. Performance is also expected to be driven by ‘ripple effect’ whereby both rental growth and yield compression are now spreading from London towards the wider south-eastern region and strong regional towns and cities.
Clearbell’s first acquisition is the £13.5 mln (€17 mln) purchase of Churchill Court at Manor Royal Business District in Crawley, one of the biggest business parks in the south east and home to more than 500 companies. Bought from Churchill Court ltd, the current rental income is £1.47 mln (1.8 mln)per year with a net initial yield of 10.3%. Clearbell plans an extensive programme of refurbishment after tenant lease expires, starting with an already vacant office building, with a view to repositioning the office complex in what is a supply-constrained market.
Rob West, Partner at Clearbell Capital, commented:“The market is improving for fringe London and south-east offices and we see potential to capitalise on the so-called London ripple effect. With £100 mln (€126 mln) of firepower, we aim to rapidly build a portfolio of unloved office buildings that are ripe for repositioning.”
Vail Williams advised Clearbell and JLL advised Churchill Court ltd.