Balanced Commercial Property Trust sells largest office holding

Balanced Commercial Property Trust has sold its largest office holding as it continues to reduce its exposure to the challenged UK offices sector and rebalance its portfolio.

Contracts have exchanged for the sale of the Leonardo Building in Crawley, a 110,000 sq ft out-of-town business park office, for a price of £26.1m. This represents a 6.1% discount to the December 2023 independent valuation.

The property, which BCPT has owned since 2015, is the largest office holding within the company’s portfolio by capital value and is occupied in its entirety by Virgin Atlantic until 2032.

The sale will reduce BCPT’s portfolio exposure to offices from 24.4% to 22.2% by capital value (based on the December 2023 independent valuation). Further targeted disposals are planned and the company is in active discussions with several potential buyers.

Since the beginning of the year, BCPT has announced the disposal of four office holdings, raising capital proceeds totaling £68.865m delivered at an aggregate discount of 2.6% to the preceding independent valuation. Three of these sales are regional out of town offices, which he company says is a structurally challenged sector of the market.

Richard Kirby, fund manager of BCPT, said: Our investment process has always focused on high quality real estate with strong fundamentals. The value in this approach is underlined by our ability to execute the disposal of non-core office holdings at resilient pricing.

“Throughout 2024, we will continue to re-balance our portfolio towards targeted growth sectors with resilient occupier markets, primarily select sub-markets within industrial & logistics and operational alternatives. We expect to announce further disposal activity in the short term as we continue to strategically reduce our exposure to the office sector.”

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