Legal & General Property (LGP) has paid more than £135m for a portfolio of six Home Counties office blocks. Collectively known as ‘Compass’ the package covers 452,233 sq ft of Grade A space.
Previously owned by a private family office client the properties — in the London satellite towns of Weybridge, Maidenhead, Slough, Bracknell, Basildon and Cobham — were sold by Jones Lang LaSalle (JLL) and Capital Real Estate Partners.
Acquired by L&G’s UK Property Fund, a property authorised investment fund, for £135.5m all the buildings are currently occupied by high-profile tenants such as Costain, Oracle, Proctor & Gamble and Honeywell. Paying an average rent of £20.61 per sq ft the companies are expected to generate their new landlord at least £9.3m a year.
“This was a great opportunity to acquire high quality assets in strong south east towns where occupier demand remains high, but investment opportunities are often few and far between,” explained Matt Jarvis, fund manager at Legal & General Property.
“The portfolio is fully let by blue chip tenants and its underlying strengths make it a natural fit for our UK Property Fund. They are decent income-producing assets and we see further potential for asset management by our team,” he added.
Noel Lander is director of south east office investment at JLL. “A portfolio of this scale and quality is, and will remain, a rare commodity,” he said.
“Combining this with an opportunity to enhance and drive future performance through rent reviews and negotiating lease re-gears meant the portfolio was met, as expected, with a high level of interest from investors.
“The sale of this portfolio highlights the strength of demand for south east offices, which continue to show a discount in pricing compared to both central London and the ‘Big Six’ regional office centres,” he stressed.
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