AEW has struck a deal to sell the remaining assets in its AEW UK South East Office Fund.
It has exchanged contracts with Ares to dispose of the 12 freehold assets for around £140m, reflecting a net initial yield of close to 7.2%.
The value add/opportunistic, closed-ended AEW South East Office Fund was established in 2014 with a five-year term and around £100m of equity in order to “create investor value through asset management initiatives in undervalued office investment opportunities” and to take advantage of “the pricing disparity between properties with long-term and short-term leases”.
The fund had target gearing of 30%-40% and a target IRR of 12%-20%, net of costs. It is run by portfolio manager Nick Winsley and assistant portfolio manager Charles Royle.
The 482,642 sq ft portfolio, of which 301,181 sq ft (62%) has been recently refurbished and has a total annual passing rent of £10.4m, equating to £21.57 per sq ft. It has an average lease term of 6.7 years and 5.8 years to first break option.
The assets are:
■ Elstree Gate, Borehamwood
■ Globe House, Marlow
■ Flagship House, Fleet
■ Rourke House, Staines-Upon-Thames
■ 33 Blagrave Street, Reading
■ New Globe House, Maidenhead
■ Waterside Court, Langley
■ ID, Maidenhead
■ Merlin House & Commercial Park, Theale
■ Vision 25, Enfield
■ Rubra 1, Wokingham
■ Dorking Office Park, Dorking
Tudor Toone is advising AEW. CBRE is advising Ares.
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