29th May 2019 09:39
LONDON (Alliance News) - McKay Securities PLC said Wednesday it has agreed to sell Station Plaza, a freehold office complex in Berkshire, to an unnamed owner occupier for GBP8.2 million.
Station Plaza consists of three office buildings totalling 41,420 square feet, first acquired by the real estate investment trust in 2014. They have passing rent of GBP900,000 per annum from a 20-year lease across all three buildings, generating a 10% income yield.
The sale of the asset is conditional on vacant possession on expiry of the current lease at the end of July .
McKay Securities was originally considering several asset management options for when the lease expired, including an office refurbishment. The sale now provides McKay with the expected refurbishment profit, at a price ahead of book value as at March 31, it said.
Proceeds from the sale will go towards reinvestment into new opportunities through either acquisitions or development.
"Station Plaza has served us well with a double-digit income yield from income of GBP900,000 pa since acquisition in 2014, and we are now recouping our purchase price with no capex. Having carefully considered refurbishment proposals to maximize the value of this asset on lease expiry in July, we are confident that the sale price, which is significantly ahead of book value, delivers the optimal result," said Chief Executive Simon Perkins.
Shares in McKay Securities were down 0.4% at 247.00 pence on Wednesday.
Related Shares:
MCKS.L