Picton Property has sold an office building to a student accommodation developer, as it continues to convert failing office space in its portfolio to alternative uses.
The sale of the partially vacant office in Cardiff, which is conditional on gaining planning permission, will be at a price dependent on the exact planning consent obtained and in particular upon the number of rooms secured, subject to a collar and cap.
The company said that in all scenarios the transaction is NAV accretive. Picton will retain an adjacent small income producing industrial unit and car parking site. Planning will be submitted by June 2024.
To facilitate the disposal, Picton has completed a number of occupier led transactions that have ensured vacant possession in 2024.
Picton is at various stages of converting further offices in its portfolio to alternative uses.
It has secured planning consents at Angel Gate, in the City of London, using permitted development rights to convert over 30,000 sq ft of office space to residential use, creating 34 dwellings.
At Colchester Business Park it has leased a vacant office suite to a healthcare occupier at a rent of £0.1m per annum, which is in line with the March ERV. The lease completed following receipt of planning permission for change of use and once the associated conditions were satisfied.
Demand for office space, especially secondary office space, has dwindled in recent years as the effect of hybrid working/working from home has played out. Energy efficiency considerations on older buildings has also played a part.
[QD comment: Picton’s proactive approach to converting the space to alternative uses (in this case student accommodation, residential and healthcare) in order to achieve a positive outcome – in terms of a sale or letting – should be applauded. The approach is and will continue to be replicated across the sector as demand for office space continues to decline.]
PCTN : Picton Property sells office for student digs conversion
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