UK Commercial Property REIT has acquired the White Building, a multi-let office asset on King’s Road in Reading, from Boultbee Brooks Real Estate (BBRE) for c. €57.7m (£51m).
The eight-storey property, which reached practical completion after a comprehensive refurbishment in 2017, comprises 95,903ft² with a modern reception area, communal roof terrace and flexible and virtually column-free floors with new floor to ceiling glazing. The asset, which is 82% let to nine tenants, has a weighted average unexpired lease term of five years to break and is expected to deliver an annual rental income of around €3.4m (£3m) once fully let. It has attracted a strong occupier mix, including Carbon Black, Workday, Pharma Cosmos, and Work.Life.
Located in Reading town centre, the White Building has excellent transport connections and is approximately six minutes’ walk from Reading Station where the Elizabeth Line is due to open in 2019, considerably improving journey times into Central London. It is also three minutes’ walk to Reading’s main retail destination, The Oracle. The asset, which has a BREAAM ‘excellent’ rating, has 106 car parking spaces and 39 secure cycle spaces.
The company has also sold 1 Rivergate, an office building on Temple Quay in Bristol city centre, to West Midlands Pension Fund for €31.2m (£27.6m), reduced to €30.1m (£26.6m) net allowing for a rental top up. 1 Rivergate is entirely let to OVO Energy Limited, the UK’s largest independent energy technology company and supplier. The asset, which was developed in 2002, comprises 69,754ft² over five floors.
Will Fulton, Lead Manager of UKCP REIT at Aberdeen Standard Investments, said: “The acquisition of the White Building in Reading, which is effectively a new office and has proven enormously popular amongst tenants, is in line with our strategy to acquire prime assets with an earnings focus; we fully expect that the property will continue to benefit from the wider infrastructure investment being undertaken in Reading, most significantly the Elizabeth Line links to central London and improvements to the public realm. Whilst the Elizabeth Line continues to be an attraction for a diverse range of occupiers, the ongoing evolution of Reading as a technology cluster remains the mainstay of activity and, we believe, positions the town well for the future. Rivergate in Bristol is a good location and, for that reason, we have retained our neighbouring property at 2 Rivergate; however, having successfully executed our asset management strategy at 1 Rivergate by securing OVO Energy on a new lease, we took the decision to sell 1 Rivergate to crystallise value for our shareholders and remove the potential for capital expenditure at the end of OVO’s lease, whilst further diversifying our portfolio and recycling capital into our strong pipeline of investment opportunities.”
Clive Brooks, Managing Director of BBRE, said: “The sale of the White Building to UKCP REIT concludes one of our most exciting office refurbishment projects to date and we are very pleased with the completed building. In 2014 we took the bold step to acquire the vacant and dilapidated King's House out of Receivership and in conjunction with our partners at CBRE Global Investors, we created an exciting workspace with exposed services that has set itself apart from other office buildings in Reading. The completed product has been extremely well received by agents and occupiers alike and that is a credit to our architect, SPPARC and the rest of our development team.”
Ian Wilson, Senior UK Fund Director at CBRE Global Investors, said: “The White Building, Reading is an excellent example of our strategy to achieve enhanced returns for our client by investing in high-quality accommodation meeting modern occupier demands in supply-constrained markets. The quality of the refurbishment delivered in partnership with BBRE has enabled us to create an exemplary office building with wide occupier and investor appeal. We are very pleased to have completed our business plan with the sale of the asset to UKCP REIT.”
UKCP REIT was advised by Knight Frank on the acquisition of the White Building and by Colliers on the disposal of 1 Rivergate. Boultbee Brooks Real Estate and CBRE Global Investors were advised by Aurum Real Estate Partners Limited.
