Wales Around the Market – 30 May

Agents pick the most significant Deals (six months to end of May)

Oakleigh House, Park Place, Cardiff

Type of deal Freehold purchase

Vendor Aviva and Hansteen (Apia joint venture)

Purchaser Mayfair Capital

Size 41,184 sq ft

Price £6.9m

Yield 7.75%

Chosen by Matt Phillips, managing partner, Knight Frank

I am highlighting the sale of Oakleigh House because I believe it clearly demonstrates the renewed appetite for good-quality, regional offices. The 1990s building is well located in a good secondary location in the city centre and is close to both the university and public sector estates. The fact that the existing tenant, Cunningham Lindsey, re-geared the lease, and the building has potential alternative use value as student and/or residential accommodation were two further factors that underpinned the interest from potential buyers.

Investor demand is growing for such quality, secondary property because of the lack of grade-A space in Cardiff, as is the case with a number of regional centres. We are, however, now seeing new schemes being developed, notably Capital Quarter and Central Square, and there is an opportunity to increase the city’s headline rental of £22 per sq ft, which is relatively low compared to other regional centres.

Matrix Court, Swansea

Type of deal Investment

Vendor Private trust client

Purchaser Colony Capital

Tenants JCP Solicitors and Welsh Government

Size 28,182 sq ft

Purchase price £2.35m

Yield 11.3%

Chosen by Graham Davies, director, Cooke & Arkwrigh

The purchaser of Matrix Court was the American fund, Colony Capital, which had previously acquired the adjoining building, let to Trillium, as part of the £97m Silverbird Portfolio in 2013. There were, therefore, good estate management reasons for the acquisition.

I also see this sale as another example of international funds seeking attractive returns from regional investments. It is interesting to see the international attention on South Wales. Clearly the returns available in the region are seen as being higher than average and, hence, valuable additions.

Yes, in isolation the properties are high up the risk curve, but when balanced with other assets and across wide geographic areas, the risk factor is somewhat diluted within the wider funds. As funds seek margins on yield it comes as no surprise to see the likes of Clearbell, Maya, Colony, Karlin & WP Carey all acquiring significant assets in the region.

Bocam business park, Pencoed, Bridgend

Vendor Macob

Purchaser Second Horizon

Type of deal Investment

Size 31,354sq ft on 29 acres

Purchase price £3m

Yield 8.5% initial (9.4% equivalent)

Chosen by Owen Young, partner, Alder King

I am selecting the purchase of Bocam Park as it proves increasing investor demand for quality properties in South Wales outside of Cardiff. The transaction included office buildings, constructed in 2007 and producing a rental income of approx £270,000 pa, development land and the freehold of much of the 135,000 sq ft estate.

The scheme, which adjoins junction 35 of the M4 motorway, will present asset management opportunities in the form of re-lettings of the vacant parts.

The adjacent land also presents on-going development opportunities for various uses.

The buidings have been purchased at a price below current construction costs and in an improving economy, where there is a lack of quality stock, we are likely to witness increasing capital values.

This is particularly relevant where there is still a lack of new development and where small increases in occupier demand will have a big impact on values, especially in the short to medium term.

Cardiff high life

Rightacres sought investment for Cardiff’s tallest tower – the £85m, 300 ft Blades residential scheme at Central Square. JR Smart lodged plans for a 23-storey block at Capital Quarter.

Civic centre sale back on

Swansea local authority revealed plans to sell the 14-acre civic centre site to help fund city centre redevelopment. The plans resurrect a regeneration project that collapsed a decade ago.

Maya doubles up

Maya Capital made two purchases in South Wales, a £6m premises in Swansea, occupied by the DVLA, and Knox Court in Cardiff, which is let to L&G, for £6.7m.