Singapore-based CapitaLand has bought the 367,000 sq ft Arlington Business Park in Reading, Berkshire, from Patron Capital for £129m.
Jason Leow, president, Singapore and international at CapitaLand Group, said: “The acquisition of Arlington Business Park is part of CapitaLand’s plan to increase our investments in developed markets such as Europe, Japan and the USA. Our strengthened presence in Europe will enable the group to maintain a balanced portfolio between emerging and developed markets.
“Post integration with Ascendas-Singbridge, we have acquired strong expertise in business parks. We can leverage this deep experience and our strong network of tenants to value add to Arlington Business Park. As we build up our portfolio in Europe, we have greater optionality in spinning off such assets into investment vehicles or partnerships, continuing to deliver value for our stakeholders.”
CapitaLand’s European portfolio now extends to S$4.8bn (£2.6bn).
CapitaLand chief executive Gerald Yong said the 11 buildings that make up Arlington Business Park offered the group “meaningful scale” in the UK business park sector.
“With increased clarity post Brexit, the acquisition is timely as general business sentiment has improved,” said Yong. “Demand for office space in the UK persists and prime office rental rates in key UK cities, including Reading, are also expected to grow by between 1% and 5% over the next two years. The UK offers strong fundamentals such as a resilient economy and transparency, and we look forward to expanding our presence in the UK and Europe.”
Patron Capital acquired Arlington Business Park in 2015 with asset management partner APAM for £75m – an 8.7% yield.
Keith Breslauer, managing director of Patron Capital, said: “This sale is a strong endorsement of our team’s ability to identify opportunities and create meaningful value for our investors. The UK has always remained an attractive place to do business and with the renewed sense of certainty brought on by December’s general election, we anticipate investing substantial equity from our latest flagship Fund IV in the UK in the months to come.”
Tenants at the park include Amazon, Clearswift, NTT Group, Regus, Veritas, Willis Towers Watson and Honda.
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