Workspace Group has sold five non-core properties in the South East of England for a total of £82m.
These disposals were from the portfolio of assets acquired as part of the McKay acquisition completed in May 2022.
The properties sold comprise light industrial and logistics properties in Bracknell, Crawley, Poyle, Theale and Weybridge. The site in Weybridge has been recently vacated with planning for refurbishment. The sale price represents a discount of 27% to the 30 September 2022 book value of these properties and is at a net initial yield of 4.5% (5.5% prior to the vacation of the Weybridge site).
The sale of these five non-core properties is being made to Tudor Investment Holdings Limited, acting as General Partner for ARGO DFI Logistics Partnership II LP. Net proceeds will be initially used to pay down the group’s bank facilities.
The company said that it was progressing with the sale of the remaining non-core properties from the McKay acquisition – light industrial properties in Farnborough, Banbury and two in Folkestone valued in total at £28m as at 30 September 2022, and a vacant commercial property in Woking town centre which has planning consent for a 366-unit residential scheme.
Workspace also provided an update on the integration of the McKay portfolio into its own, as follows:
- The seven London properties, valued at £162m on 30 September 2022, are now managed as part of its London portfolio. Workspace is adapting them to its multi-let configuration and flexible offer which it expects will deliver premium pricing
- The South East office and business park portfolio, comprising 13 buildings valued at £134m as at 30 September 2022, will over time allow Workspace to selectively test demand for its business model in well-connected feeder towns to London which it says are under-served with quality flexible space catering to the demands of SMEs
- Cost synergies are well ahead of its 50% cost reduction target, with McKay corporate costs reduced from £6.4m per annum prior to acquisition to £0.9m per annum at March 2023
Graham Clemett, chief executive of Workspace, commented: “This sale of a substantial element of the non-core assets from our purchase of McKay is an important step in our acquisition plan. There is still more to do but we are confident our acquisition will generate attractive returns for shareholders as we complete the delivery of these plans.”
WKP : Workspace sells £82m industrial portfolio