The Board of CLS is pleased to announce that Citadel Holdings plc, its wholly owned subsidiary, has purchased a portfolio of 10 properties from Banque Hervet in Paris.
The properties are located in established office areas of various Parisian suburbs close to and with good communications to central Paris. They comprise 18,061 mÂ² (194,413 sq ft) of office space together with 384 car parking spaces and are let to 57 different tenants. The vacancy rate at acquisition was 2.6%.
The rental income from the properties is â‚¬3,663,790 (Â£2,344,826) per annum, which equates to â‚¬203 per mÂ² (Â£12.06 per sq ft), and there is a significant reversionary element.
The total purchase price for the properties was â‚¬42,525,000 (Â£27,216,000) inclusive of costs, representing an initial yield of 8.6%. After planned lease restructuring the yield is expected to rise to 9.25%. The initial return on equity is 23.4% whilst the initial cash return on equity is 15.2% based on a completed loan facility of â‚¬31,252,000 (Â£20,001,280) at an interest rate of 4.60% on a floating rate basis hedged with an interest rate cap.
In addition to this acquisition the Board of CLS is pleased to announce that a number of new lettings and lease renewals have been completed this year in respect of various properties within its existing French portfolio.
In total the new leases secure the letting of 2,906 mÂ² (31,281 sq ft) and an annual rental income of â‚¬810,085 (Â£518,454), of which â‚¬181,156 (Â£115,940) represents increased rent on space previously
let. The average rental increase for these renewals is 37%. New lettings of previously vacant space of 717 mÂ² (7,718 sq ft) produce additional annual rental income of â‚¬137,015 (Â£87,960). After the new lettings the vacancy rate of the whole French portfolio stands at 1.7%.
Executive Chairman, Sten Mortstedt, said: â€œI am pleased that we are continuing to find good investment opportunities generating good returns and that we have been able, through active asset management, to realise some of the reversionary value in our portfolio, thus enhancing asset values.â€