McKay acquires prime Richmond office for £14.75m

11 October 2021

McKay acquires prime Richmond office for £14.75 million

McKay Securities Plc ("McKay" or "the Company"), the only UK REIT specialising entirely in the South East and London office, industrial and logistics markets, announces the acquisition of Evergreen Studios, a fully refurbished office asset in central Richmond, for £14.75 million, representing a net initial yield of 5.8% The property was sourced off-market from Sheen Lane Developments, which has taken a two-year leaseback of the property.

Totalling 17,325 sq ft, Evergreen Studios offers Grade-A open plan office space spread across five floors ranging from 3,300 to 3,600 sq ft. The entire building has been refurbished to a high standard, incorporating wellness focused amenities to meet post-covid workplace trends, including high-quality air conditioning, access to outside space via rooftop terraces, private kitchens, car and cycle parking and shower facilities. In line with McKay's ESG strategy, the building also includes a range of energy saving measures, including LED lighting and double glazing, and has an EPC rating of B.

On completion of the sale, Sheen Lane Developments has entered into a two-year lease of the whole building, at a rent payable from commencement of £0.92m p.a (£53.00psf). A marketing campaign to sub-let on a floor-by-floor basis is underway, with the ground floor already let, and encouraging interest for the remaining four floors.

Located on the edge of Richmond Green, Evergreen Studios is well positioned to benefit from the current undersupply of quality space within Richmond's established office market and post covid demand for high quality, environmentally friendly office space, offering excellent value for money in an attractive and proven south west London suburb. The building is two minutes' walk from Richmond railway station and offers easy access to Central London, Gatwick and Heathrow airports via train and tube. It also sits just a short walk from Richmond's main shopping area, with its plentiful retail and leisure offerings.

Commenting on the purchase, Simon Perkins, Chief Executive of McKay, said: "The purchase of Evergreen Studios adds a prime, fully refurbished office building to our London and South East office portfolio, recycling some of our capital from recent disposals in line with our selective acquisition strategy. The two-year leaseback to the vendor provides us with an attractive yield and income from the outset. As the occupational market builds momentum, we expect to add value with further lettings from organisations looking for employee friendly, high quality space outside of central London with good environmental credentials. With an LTV of 32.4% at 31 March 2021, and headroom of c£75 million to existing loan facilities, we continue to explore a range of opportunities to generate shareholder value."

CWM acted for the vendor and Savills acted for McKay.

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For further information, please contact:

McKay Securities Plc FTI Consulting

Simon Perkins, CEO Dido Laurimore, Talia Jessener

Giles Salmon, CFO 0203 727 1000

0118 950 2333 [email protected]

About McKay Securities

McKay Securities Plc is a commercial property investment company with Real Estate Investment Trust (REIT) status, listed on the main market of the London Stock Exchange. It specialises in the development and refurbishment of office, industrial and logistics buildings within proven markets of South East England and London. The portfolio at 31 March 2021 comprised 33 properties, valued at £437.90 million, located in established areas, predominantly along the M4 corridor, where McKay has deep expertise, with a focus on growing satellite towns benefitting from strong connectivity to London and robust demand amongst leading occupiers. www.mckaysecurities.plc.uk