13th Oct 2014 08:53
LONDON (Alliance News) - Development Securities PLC said Monday that it has sold the majority of its mixed-use development in Romford for GBP12.3 million to Henderson Global Investors.
The property and investment company said it has sold the majority of its Market Place property in order to allow it to "recycle equity into further development and investment opportunities" and add value through regeneration projects.
The GBP12.3 million sale price reflects a 6.96% yield.
Development Securities acquired Market Place with an adjacent office building, Tollgate House, in July 2013 for GBP8.3 million from administrators acting on behalf of Lloyds Banking Group.
The development comprises two phases: the first phase includes 44,300 square feet of retail space let to national retailers including Aldi, Boots and Iceland as well as 69 sold off residential apartments. The second phase comprises 35,200 square feet of retail space and 22 residential apartments.
The company has completed the required construction and refurbishment works to both phases, it said, and has fully let the retail space and marketed the apartments for private sale. 20 of the 22 apartments - which are not included in the sale to Henderson - have exchanged or completed and the remainder are under offer. In total, the apartments are set to generate proceeds of GBP4.7 million.
Development Securities said Tollgate House will not be retained long-term. The building includes 8,100 square feet of office space and 2,500 square feet of retail space and is 93% let, generating an annual income of GBP190,000, offering potential for further asset management in order to drive value, said the company Monday. It was not included in the sale to Henderson.
"Since acquiring Market Place, we have significantly increased the value of this asset through development and refurbishment works," said Matthew Weiner, executive director. "The development benefits from a town centre location within easy reach of Romford station which will be linked to Crossrail in 2018."
In September the company reported that the GBP100 million Circus Street regeneration project it is involved with in the centre of Brighton had received planning permission. Development Securities is working in a joint venture with McLaren to help transform a derelict market in the centre of Brighton into a commercial, cultural and residential quarter. The development will include 142 new homes, 450 student beds, 38,000 square foot of office space, a dance studio and a new library and academic building for the University of Brighton.
Development Securities shares were Monday trading 2.33% higher at 186.50 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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