Palmer Capital, announced that it has completed the acquisition of all of the debt secured against Finzels Reach - a mixed-used development project in Bristol city center, having purchased the outstanding 50% of the debt it did not already own in the project.
Together with the 50% bought from Deutsche Postbank in August 2013, Palmer Capital has now acquired 100% of the non-performing loans secured against the project.
The Finzels Reach project has an estimated gross development value of £150 million (approx. €180.16 million) and Palmer Capital is undertaking a comprehensive project review with Cubex Land, a Bristol-based developer and Palmer Capital backed company, in order that the development can be progressed.
Finzels Reach is a 4.7 acre mixed-use regeneration project in the heart of Bristol’s business district and overlooking Bristol’s floating harbour towards Cabot Circus which has planning consent for 400 apartments, 300,000 ft² (approx. 27,870 m²) of offices and 90,000 ft² (approx. 8,361 m²) of retail. The site currently contains 115,000 ft² (approx. 10,683 m²) Grade A office, Bridgewater House, which is 30% let to BDO and Barclays, and 195 apartments in three buildings: Castle Wharf, Malt House and the Hop Store. Palmer Capital intends to create a new destination neighborhood with offices, restaurant and additional residential and ancillary uses, as well as providing employment for around 1,000 people.
The transaction provides a compelling investment opportunity through the delivery of new residential and office product into the Bristol market at an opportune time in the market cycle, as a lack of development has reduced supply. There is particular demand for Grade A offices from a number of substantial occupiers seeking expansion or relocation space in the city.
Current forecasts show that demand for offices in Bristol will have outstripped supply by 2015 and that by 2017 the annual growth in rental value will exceed 3.5% (source: GVA). This is a trend that Palmer Capital is experiencing across the UK’s key regional cities and one which it is keen to take advantage of by utilizing its strong regional network, as recovery spreads to the regions and investors look beyond London to find value.
Palmer Capital anticipates a phased delivery of the project with completion expected in mid-2016. The initial focus will be on a new marketing campaign for the 73 built but unsold apartments which will be launched in January 2014 and run concurrently with the leasing of the remaining available Grade A office space at Bridgewater House.
Palmer Capital also intends to progress the development of the Finzels & Cask element of the project in 2014, which has consent for 32 prime waterside residential apartments offering views of the Floating Harbour. The remaining seven plots then offer an attractive mix of new build and sensitively redeveloped period buildings to be delivered over the course of the business plan in subsequent phases.
Alex Price, Chief Executive of Palmer Capital, said: “This transaction further demonstrates our ability to source and execute the acquisition of assets where the underlying property affords a compelling opportunity to create value through the adoption of a very proactive and hands-on approach to asset management. We believe that by having the confidence to take on development, letting and sales risk in Bristol at this early stage in the recovery cycle, we will be very well placed to capitalize on an acceleration of interest in the regions that we are now starting to see from institutional investors.
Gavin Bridge, Director of Cubex Land, Bristol said: “This project will play a crucial part in enabling Bristol to meet the growing demand for residential and office accommodation in its city center. Cubex Land welcomes the opportunity to reengage with the local community and help bring the regeneration of this strategic site forward.”
Source: Palmer Capital