LONDON, 24th July 2018 – Floreat Real Estate has completed the purchase of two offices in Bristol and Cardiff in an off-market transaction totalling £44.7m, to provide a net initial yield in excess of 7%.
The purchase of Castlemead, the tallest office building in Bristol with 137,000sqft of high quality office accommodation adjacent to Cabot Circus, and Churchill House – which has 87,000sqft of office accommodation and ancillary retail in Central Cardiff – provides approximately eight years of income from multiple tenants.
The transaction is the second for Floreat this year, following the purchase of the Shipping Building, part of the Old Vinyl Factory regeneration, in West London.
Floreat believes these properties provide a compelling opportunity given the current market environment. The UK regional office market continues to perform well at present, driven by a lack of new supply and a buoyant occupational market.
William Hardyment, principal at Floreat Real Estate, said: “We are delighted to acquire these two properties. The assets, located near their cities’ retail districts and transport hubs, provide a compelling offer for occupiers.”
“The purchase helps fulfil our strategy to acquire quality buildings, with high underlying site values and sustainable income. This enables us to add further value, through active asset management, by creating work places that can help our customers attract and retain talent”
Nick Prior, Co-Founder of Oval Real Estate, commented: “The off-market sale provided a compelling opportunity to deliver strong returns to investors. It followed a detailed asset management and refurbishment programme for the two assets.”
Floreat was represented by Montagu Evans and Oval was represented by CBRE. Investec Structured Property Finance provided Floreat a £29.1m investment loan to help reposition and enhance existing income.