2nd Sep 2014 06:30
LONDON (Alliance News) - McKay Securities PLC Tuesday said it has bought the freehold of Station Plaza, Theale from M&G Real Estate for GBP8.46 million, representing an initial yield of 10.1%, and expects to be able to increase the rents on the properties in coming years.
The Real Estate Investment Trust focused on office and industrial properties in London and south east England said Station Plaza consists of three office buildings totalling 41,646 square foot. It was built in 1999 to 2000, and has 170 car parking spaces providing a generous ratio of 1:245 square foot. It is located at Junction 12 of the M4 motorway, on the southern side of Reading.
The buildings are let to Nocitra Ltd on three separate leases expiring on July 7, 2019. The total rent of GBP900,000 a year equates to GBP21.71 per square foot. Nocitra occupies the 19.587 square foot Theale House, and half of Building A with the balance sublet. Building B, covering 12,068 square foot is unoccupied and surplus to their requirements, McKay said.
"These modern office buildings are let at rents significantly below central Reading and we anticipate future increases as rental gains in Reading town centre ripple out. Rail electrification from 2017 will also benefit the property, with improved access to Reading and Crossrail links to London," McKay Managing Director Simon Perkins said in a statement.
"The lease structure provides the opportunity to work with the tenant to restructure its leases whilst continuing to benefit from the high yield this acquisition provides," he added.
McKay raised GBP87 million in February, and has now spent GBP63 million on six acquisitions. The company is continuing to look at further potential acquisitions and portfolio opportunities, Perkins said.
By Steve McGrath; [email protected]; @stevemcgrath1
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