Development Securities today announces that it has sold Colston Tower, an 89,000 ft² (approx. 8,268 m²) office building located in the center of Bristol, to Resolution Property for £12.3 mln (approx. €15.5 mln), equivalent to an exit yield of 8.25%. The sale of this investment asset will realise a profit of £2.0 mln (approx. €2.5 mln) for the company in line with expectations.
Development Securities acquired Colston Tower in a 75:25 joint venture with Ellandi in 2011 for £7.6 mln (approx. €9.6 mln) at a 10.08% initial yield. Since acquisition, the joint venture partners have invested a further £1.9 mln (approx. €2.4 mln) on refurbishments and improvements within the building. These improvements have enabled headline rental levels to increase from €12 psf to €18 psf over the period of ownership and 90% of tenants with lease expiries or breaks have renewed.
Matthew Weiner, Executive Director, Development Securities said: “We have added significant value to Colston Tower during our ownership, improving the quality of the building and thus increasing rental values and improving occupancy levels. The profitable sale of this asset will allow us to recycle capital into further investment opportunities where we see strong potential to generate value.”
Mark Robinson, Investment Director, Ellandi added: “We have executed and then exceeded our business plan for this investment showing that good asset management principles can be applied across different sectors to achieve outstanding returns.”
Source: Development Securities