CLS Holdings has exchanged contracts to acquire a portfolio of commuter belt office properties for £59.71m.
The portfolio consists of One Church Road, in Richmond; Priory Place, in Chelmsford; and Kings Court, in Leatherhead.
One Church Road is located adjacent to Richmond Station, providing fast access to several commuter hubs including Clapham Junction and London Waterloo, and benefits from car parking and bike storage spaces. The 46,995 sq ft office building is multi-let to four tenants.
Priory Place is a 41,036 sq ft building located in the centre of Chelmsford, Essex. The asset is in close proximity to Chelmsford Station, enabling a 30-minute train journey to Liverpool Street Station, and benefits from 80 car parking spaces. Priory Place is currently multi-let to five tenants with a significant proportion of the building let to HM Courts & Tribunals Service.
Kings Court is located in central Leatherhead, an eight-minute walk from the station, with a direct train line to London Waterloo and London Victoria stations and comprises 30,759 sq ft of office space. The three-storey building is let to two tenants and has 166 car parking spaces along with bike storage.
The portfolio is 94% let with a weighted average unexpired lease term (WAULT) of 3.8 years to breaks and delivers £3.7m net rent per annum, reflecting a net initial yield of 5.9%.
CLS said significant opportunities exist to add further value through additional refurbishments, sustainability enhancements and other active asset management initiatives that would drive rental growth. CLS intends to finance the acquisition through existing cash resources with completion expected 28 September.
[QD comment: This is a big vote of confidence for the UK office market and the South East/Greater London commuter belt market. The future of offices has been a big talking point during the Covid-19 pandemic, with a shift to working from home and agile working one of the expected long-term trends. Offices on the outskirts of London are expected to see an uptick in demand as businesses reassess their office footprint needs.]
CLI : CLS acquires commuter belt office portfolio for just under £60m