Orchard Street Investment Management has acquired the Velocity office development in Weybridge from Rockspring’s UK Value fund, for £56.1 million representing a net initial yield of 5.7 per cent.
Velocity, completed in 2013 by Rockspring and joint venture partner Exton Estates, comprises two independent buildings known as Velocity One and Velocity Two, which, combined, offer 106,400 sq ft of Grade A space, or 58,393 sq ft and 48,007 sq ft respectively.
The overall development benefits from floor to ceiling windows throughout, providing a good source of natural light, and as a result of its sustainable design has achieved a rating of “excellent” by the BRREAM environmental assessment method.
Rockspring partner and fund manager for the UK Value series, Richard Bains, believes that the deal reflects the amount of work put into the Velocity development by the firm.
He says; “Velocity was one of the first forward funded speculative office developments in the South East following the global financial crash, and through capitalising on attractive pricing opportunities, Rockspring were able to construct and deliver Grade A office space in an unrivalled location.
“The strategic sale of this asset has achieved strong returns for our UK Value fund investors.”
At present, the Velocity development is 76 per cent let to three tenants, LG Electronics, Cargill PLC and Tomy UK Co. Ltd, which provide an attractive weighted average lease length of just under 12 years. The remaining 24 per cent, or 25,000 sq ft, of office space is available for immediate occupancy, meaning Orchard Street has the option of utilising its extensive asset management skills in the short term.
Orchard Street expects a high degree of interest from potential occupiers, given that Velocity lies just 24 miles south west of Central London. In addition, the site boasts strong road and rail links, and is just 12 miles away fro Heathrow.
Orchard Street partner Barney Rowe says; “We are pleased to have secured this highly liquid, prime office asset in an area of the UK that has seen strong occupational demand and is forecast to continue experiencing rental growth over the coming years.
“Velocity benefits from excellent fundamentals and a key South East position supported by unrivalled transport links.
“A combination of the current covenant strength on the existing income and the increasing popularity of this area amongst high profile corporate occupiers provide a number of attractive asset management opportunities for our team to pursue.”
In a separate statement, Orchard Street confirmed the promotion of Richard Walters (below) to Partner after four years with the firm.
After joining in 2011 from Invista Real Estate Investment Management, Mr Walters quickly secured the role of associate and was subsequently promoted to head of business space – a role which he will continue to hold in order to oversee the asset management of over £2 billion properties in the firm’s UK asset portfolio.
Managing partner Philip Gadsden says; “This promotion is significant for both Richard and our business.
“I am particularly pleased to have the benefit of Richard’s skills and experience around our Partnership table which I am confident will help us continue to grow our business in the style we have in recent years that suits both us and our clients.
“I look forward to Richard’s increasing contribution over the coming years as our Partnership continues to deliver consistent outperformance for our clients.”
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