Stow Securities is to widen its asset base beyond central London and the West End, and has launched this strategy with two deals at Heathrow.
The private Mayfair-based investment group, backed by a handful of high-net-worth individuals, has £100m of gross assets, predominantly made up of West End properties. It wants to increase this to £250m over the next two to three years.
Its first two deals are the purchase of adjoining office blocks and a development site on the south side of Heathrow airport, from the Airport Industrial Limited Partnership, for £8.75m.
Cirrus House and Nimbus House, Bedfont Road, which total 26,570 sq ft, are let to Swissport International until October 2017 at £600,000 pa – a 6.81% yield.
Stow has secured planning consent for a 22,000 sq ft office on the adjoining 0.3-acre site, which it has prelet to BMED (British Mediterranean Airways) for 15 years at £27 per sq ft. This is the first office prelet in Heathrow for several years.
Stow’s property director, Tim Mockett, said he was looking at further assets and portfolios “from London to the M25 and beyond”. “At the moment, there’s generally better value outside central London.”
Stow’s West End portfolio includes the 75,000 sq ft Viewpoint building at 20 Balderton Street, W1, which it developed with Grosvenor.
Stow was unrepresented on the Heathrow deals and Montagu Evans acted for AILP, which is managed by Scottish Widows and partly owned by BAA.
Nick Ireland, senior investment manager at Scottish Widows Investment Partnership, said the offices had not fitted well in its specialist fund: “This sale represented a good opportunity to sell non-core assets into a strong investment market.”
