CLS Holdings has sold a portfolio of government-let regional offices in the UK for a total of £65m to Elite Capital Partners – a Singaporean investment firm.
The 19 offices are located across the UK outside of the South East and, following major lease re-gears last year, have less active asset management potential. The group said the sale of the portfolio was in line with its strategy of actively recycling capital and focusing the UK portfolio on London and the South East.
Following the completion of the transaction, which was sold at a 2.1% discount to June 2019 valuation, CLS will hold only two assets in the UK located outside of the South East.
The sales of 17 of the 19 offices, which are held freehold or heritable title, have simultaneously exchanged and completed for £62.1m. The sales for £2.9m of the remaining two assets, which are held long leasehold, have exchanged and are expected to complete in Q1 2020, subject to the consent of the freeholder.
The portfolio comprises 618,223 sq ft and is 97.5% let to various UK government bodies with a WAULT of 4.1 years to breaks. The portfolio has net rent of £6.5m a year at an average of £10.62/sq ft.
Fredrik Widlund, chief executive of CLS, said: “This transaction is a significant step in implementing our strategy of focusing our UK portfolio on London and the South East office markets, a region in which we remain confident of the long-term prospects. We continue to see significant opportunities for acquisitions across our core markets and this transaction will allow us to recycle capital to capitalise on those opportunities.”
CLI : CLS sells government-let office portfolio for £65m