Agents pick most significant deals (six months to end of August)
MORRISONS DISTRIBUTION CENTRE, BRIDGWATER
Vendor Morrisons
Purchaser Aviva Investments
Type of deal Investment
Size 750,000 sq ft
Price £800m
Chosen by Tim Davies, head of Bristol office, Colliers International
I would say the most significant deal in 2014 so far has been the sale of one of the South West’s most recognisable buildings: Morrisons’ distribution centre. With its ‘camouflage-style’ exterior stretching along the M5 for almost a mile, this is a high-profile asset, which fetched a high price in an off-market deal.
With London becoming overheated, a lot of overseas investors are looking at iconic buildings, especially with a named tenant in situ, elsewhere in the country. There were probably 10-plus people looking at it – both overseas and UK funds – and Aviva came out on top, acquiring the centre for a cool £80m, with Morrisons then signing a 25-year lease.
“Offering fantastic accessibility because of the motorway, the Bridgwater centre also offers a strong covenant – two reasons why it was no surprise that Morrisons saw stiff competition from funds looking to acquire this asset.
HANOVER HOUSE AND HANOVER COURT, MARSH BARTON, EXETER
Vendor USE Ltd – Scarborough Group International
Purchaser Scot Group
Type of deal Investment
Size 31,500 sq ft
Price Circa £2m
Chosen by Damian Cook, director, Stratton Creber Commercial, Exeter
This deal reflects the improved confidence and underlines the resurgence of the Exeter office market. With the lack of new office developments since the height of the market in 2007, there is now the danger of a shortage of good quality office accommodation in Exeter.
Hanover House and Hanover Court had been only 60% occupied for more than five years. Historically high rents and the need to upgrade the accommodation had resulted in lack of interest from new occupiers and those who were in occupation looking to vacate. With the shortage of new stock over recent years, Hanover House was able to satisfy Scot Group’s requirement for 30,000 sq ft for its own occupation.
Successful negotiations with Lombard North and the DVLA to surrender and vacate enabled the purchasers to commence an extensive refurbishment, to provide what will be state-of-the-art offices as their new headquarters.
Vendor Davis Holdings Ltd
Purchaser Private company
Type of deal Investment
Size 3,328 sq ft
Price £1.2m-plus
Chosen by Ian Lambert, partner in charge of investment agency, Hartnell Taylor Cook
This recent sale of a well located retail/office investment at a sub-7% yield helped to produce further evidence of continued strengthening demand in the regional investment market.
The investment, a prominent retail unit in Exeter’s prime retail pitch, comprises a mid-terrace building, let to handmade cosmetics retailer Lush, which trades from the ground and basement levels. There are also self-contained offices on the upper floors, which are fully let. The investment generates an annual income of £85,750.
There was strong interest in the investment and the sale was brought to a head via a best bid process resulting in a price in excess of the £1.2m asking price being achieved.
It proves a continued appetite from the private investor market for sub-£2m lot sizes, particularly for well-let, well-located assets situated in strong regional centres like Exeter. In this particular instance, the multi-let upper floors also presented some interesting asset management opportunities.
Going up
PWC SMASHES OFFICE RENT
PwC was preparing to prelet at Salmon Harvester’s and NFU Mutual’s 2 Glass Wharf scheme in Bristol. The deal would establish the city’s highest office rent – £28 per sq ft – for almost 10 years.
BOOST FOR REGEN SCHEMES
Two mixed-use regeneration schemes moved forward in Plymouth as English Cities Fund submitted plans for Millbay, the Victorian docks area, and Plymouth city council appointed agent Alder King to unlock plans for Devonport Naval Base.
NEWQUAY JOINS THE SPACE RACE
Newquay Cornwall Airport became the only English location to make it onto a government shortlist of possible sites for the UK’s first spaceport.
FUNDS EARMARKED FOR RESI
Schemes benefitting from £850m of government funding to unlock projects with infrastructure investment included Monkton Heathfield in Taunton, Newcourt Urban Extension in Exeter and Weston Airfield in Somerset.
DUCHY DOES DOUBLE
The Duchy of Cornwall was busy buying and selling in the county. While a 45-acre estate near Tintagel was put on the market, talks took place to purchase 800 acres of the Port Eliot estate.
Going down
GAME OVER FOR YEOVIL
Yeovil Town Football Club abandoned plans for a supermarket development intended to fund a new stand at its Huish Park ground after lengthy negotiations with South Somerset district council broke down.
