Alpha Real Capital has purchased the 154,000ft² Temple Quay House, Bristol for €80.4m (£73.3m) representing a 4.03% Net Initial Yield and a 5.04% Reversionary Yield. The building is let to the Secretary of State, Communities and Local Government (UK Government) for over 18 years on an FRI lease. The building has large flexible floorplates of up to 29,000ft².
The UK Government has been in occupation of the property, which has a BREEAM excellent rating since it was built in 2001. An extension to the lease to 2037 has been signed recently, and the Government is scheduled to spend over €16.4m (£15m) on improvements to the building.
The property is located in close proximity from Bristol Temple Meads Railway station which is Bristol’s main Railway Station, which provides quick and easy access to London Paddington, Reading, Cardiff and Birmingham New Street. Bristol has become one of the largest employment bases for banking, finance and insurance sectors outside of London, largely due to ease of access and well-educated population with 54.2% of Bristol working-age residents qualified to degree level which is significantly higher than the national average of 38.6%.
Phillip Rose, CEO, Alpha Real Capital said: "Alpha is a leading investor in long income real assets. Alpha focuses on acquiring long-lease properties and freehold ground rents across a diverse range of sectors. Our focus is on secure income backed by real assets. The length of the UK Government’s lease, approaching two decades, the strength of the Government’s commitment to the building together with the significant under-renting of the building and 5% reversionary yield strongly underpin the property’s income security.”
