McKay Securities has acquired Rivergate, a multi-let office building fronting Newbury Business Park for c.€18m (£15.5m). The purchase price reflects a net initial yield of 7.5% prior to adjustment for the value of letting incentives.
Providing 61,385ft² of lettable space over three floors and generous car parking totalling 323 spaces, the property is fully let to six occupiers including Capita Business Services, Cavendish Nuclear and Coffin Mew with a WAULT of 8.8 years, or 6.7 years to first break. The property has recently benefitted from a comprehensive refurbishment to the reception, common parts, first and second floors and the contracted rental income of€1.49m (£1.29m) pa represents a low rental value of €24.79 (£21.40) psf.
Commenting on the purchase, Simon Perkins, Chief Executive of McKay, said: “Rivergate is one of the best office buildings in Newbury and has proved its appeal to occupiers with recent lettings all at, or in excess of, ten years. The building stands in good condition with limited CAPEX requirements and will provide shareholders with a high yield and long income. Its low rental level relative to the wider market and the potential to add area and refurbish the ground floor provides plenty of scope for future growth, complementing other value-enhancing opportunities across our wider portfolio.”
