AIM-listed regional office investor Circle Property has continued its disposal strategy with the sale of Somerset House in Birmingham for £15.18m.
The sale price for the mixed-use city centre building represents a 96% uplift on initial purchase price, but a decrease of 16.1% on the 31 March 2022 valuation of £18.1m.
Circle, which was founded by James Hambro of the Hambros Bank family with John Arnold and John Bodie in 2002, said the sale price was “reflective of the reduction in valuations being seen across the wider UK commercial property market at present and yield shift”.
The purchasing company is Somerset Land and Property, which was registered at Companies House by Bracknell-based Yonah Chaim Reich earlier this month.
Somerset House comprises around 38,805 sq ft of office space let to BE Group and 10,956 sq ft of leisure space let to Las Iguanas and Camerons Brewery, with two leases of approximately 13 years to expiry and total rent passing of approximately £1.2m per annum.
Circle bought the property in January 2016 for around £7.75m. The profit before tax for the year ended 31 March 2022 attributable to Somerset House was just over £500,000.
Circle repaid its debt facility in June and is now debt free. It recently sold buildings K1 and K2 at Kents Hill Business Park, Kents Hill, Milton Keynes; Cheltenham House, Temple Street, Birmingham; and Elizabeth House, London Road, Staines. These have produced a current cash balance of £23.8m.
The net proceeds from disposals, following completions, will be held as group cash and the board expects that a minimum of two returns of capital will be made to shareholders, the first of which is expected to occur by March 2023.
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