US-based distressed asset investor CarVal has bought a slice of the Farnborough Aerospace Centre in Hampshire for close to £70m.
The deal, which comprises four of the nine office blocks on the 36-acre site, provides a major asset management opportunity for CarVal, with average lease lengths across the 244,000 sq ft of office space being just 2.5 years. It provides an annual rent of £19.4m.
The site had formed part of Robert Tchenguiz’s empire. It was put up for sale by receivers through JLL in November last year as part of a bid to recoup funds for creditors of Kaupthing, the collapsed Icelandic bank that lent £1.6bn to Tchenguiz before the financial crisis.
BAE Systems occupies the entire site and sublets more than half of its space to companies including fellow defence and security manufacturer Lockheed Martin and insurance firm Zurich.
Rents on the park average just £20 per sq ft, with prime rents in Farnborough averaging £22 per sq ft and rental growth of 3.7% predicted between 2015-2018, according to IPD forecasts.
The ability to regear and relet space at the park comes at a time when there is no grade-A space available in the area and a total availability of just 100,000 sq ft, compared with demand of more than 500,000 sq ft.
CarVal was advised by Tudor Toone.
