McKay Securities has bought Rivergate, a multilet office building fronting Newbury Business Park in Berkshire, for £15.5m.
The purchase price reflects a net initial yield of 7.5% prior to adjustment for the value of letting incentives.
The office provides 61,385 sq ft of lettable space over three floors and car parking. It is fully let to six occupiers, including Capita Business Services, Cavendish Nuclear and Coffin Mew, with a WAULT of 8.8 years, or 6.7 years to first break.
McKay said it has a low rental value of £21.40 per sq ft.
Simon Perkins, chief executive of McKay, said: “The building stands in good condition with limited capex requirements and will provide shareholders with a high yield and long income. Its low rental level relative to the wider market and the potential to add area and refurbish the ground floor provides plenty of scope for future growth, complementing other value-enhancing opportunities across our wider portfolio.”
The deal comes after EG reported last month that McKay had put a City office block up for sale for in excess of £76m. The price reflects a net initial yield of 4.2%.
The 58,585 sq ft office block, known as Aurum, comes with a 15-year lease in place with FTSE-listed St James’s Place Wealth Management Group.
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