Orchard Street Investment Management (‘Orchard Street’), the specialist commercial property investment manager, has completed the acquisition of 3 Arlington Square in Bracknell, Berkshire for £22.65 million. The asset was acquired from Arlington, with the purchase price representing a net initial yield of 6.25%. The acquisition was made on behalf of St. James’s Place Property Unit Trust.
The multi-let Grade A property provides 67,862 sq ft of highly-specified office accommodation, arranged over ground and four upper floors, with 298 on-site car parking spaces equating to a ratio of 1:228 sq ft. Constructed in 2001, the building has recently benefited from a major capex programme including upgrading the triple height reception area and mechanical equipment, and a comprehensive refurbishment of the majority of the office space. The building is 92% let to six high-quality tenants including Legal & General Homes, Ivanti and Quest Software, providing a total rental income of £1,510,870 per annum, reflecting a low £22.26 per sq ft overall. The asset provides a WAULT of 7.2 years to expiries and 3.4 years to breaks.
The property is situated in Arlington Square, Bracknell’s prime office location adjacent to the town centre, in the heart of the Thames Valley, within 5 miles of the M4 motorway and 6 miles of the M3 motorway. The town benefits from access to Heathrow Airport within 27 minutes and Central London by train within 55 minutes. Bracknell’s town centre has recently undergone a major £240m regeneration project which included the opening of a new one million sq ft retail and leisure destination, The Lexicon, improvements to local transport and landscaped public spaces, and 1,000 new homes planned as part of the next phase of regeneration.
Barney Rowe, Partner at Orchard Street, commented:
“3 Arlington Square is a prime asset which offers high-quality office space in a strong town centre location, with the rental tone representing a compelling discount to neighbouring Thames Valley markets including Reading, Staines and Maidenhead. With the major regeneration of Bracknell’s town centre and strong population growth forecast, we consider it an optimum time to invest in this improving market.”
James Raven, Managing Director of Arlington, commented:
“This sale at Arlington Square completes the initial phase of re-positioning our portfolio, following our acquisition by TPG, and we now turn our focus to reinvesting in our core Portfolio to create a series of amenity rich, customer focused business locations, and in developing out our landbank.”
Orchard Street was advised by Cushman & Wakefield on the transaction, whilst Arlington was advised by BNP Paribas Real Estate.
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Orchard Street Investment Management
Established in 2004, Orchard Street Investment Management LLP is a leading specialist commercial property investment manager, focused on the UK market. It acts on behalf of institutional clients world-wide to advise on investing in and the active management of property assets, including industrial, retail warehouses, offices and shopping centres. Orchard Street currently has assets under management exceeding £5 billion.