Rockspring Property Investment Managers, announces that, on behalf of Rockspring UK Value Fund, it has sold Gateway House in Richmond, London, for £44.1 million (approx. €52.8 million), reflecting a net initial yield of 5.0% pa, to a private client of Cushman & Wakefield. Gateway House comprises 62,000 ft² (approx. 5,760 m²) of office space, fully let to Reed Exhibitions, seven retail units and a multi-story car park.
Since acquiring the property in 2011, Rockspring has added value through a number of asset management activities, including: completing a letting to Sainsbury’s Local on a new 20-year lease; re-gearing the lease with office tenant Reed Exhibitions on improved terms and for additional space; settling a rent review for the car park at a 70% uplift over passing rent and acquiring the head leasehold interest, thereby increasing the tenure from 82 to 982 years.
Gateway House is the final asset to be sold from the St. Martin’s South East office portfolio, which comprised five office properties acquired by the Fund in February 2011 for £47.78 million. Following the acquisition, Rockspring implemented a number of asset management initiatives at the properties and has now successfully sold all of them, achieving a portfolio level IRR in excess of 20% pa.
The other properties in the portfolio were: Oriel House, The Quadrant, Richmond, Kings House & Conquest House, Wood Street, Fife Road, Kingston-Upon-Thames, Hays House Guildford and Overline House, Crawley.
Richard Bains, Rockspring UK Value Fund Manager, said: “This investment exemplifies the type of deal that the UK Value Fund program targets, allowing us to leverage Rockspring’s asset management expertise to create value at properties that have been under-managed, and successfully complete sales to generate strong returns on behalf of our investors.
“We continue to see opportunities in the market where our unique skill-set and experience of the UK real estate sector will allow us to generate income and value growth, and aim to take advantage of these for investors in our next vehicle, UK Value Fund 2, for which we are currently fundraising.”
Chris Lewis, Head of National Office Investment at Cushman & Wakefield, advising the purchaser said: “This represented an excellent opportunity for our client, matching their requirements for long term reversionary income diversified across a range of strong covenants including the government for over 56 years. It further appealed as it occupies a strategic site adjacent to the mainline rail and underground stations in an affluent Greater London suburb.”
Montagu Evans acted for Rockspring, while Cushman & Wakefield acted the purchaser.
Source: FTI Consulting