The tenant’s lease had 1.5 years to expiry and the building required refurbishment. The low rent of c.£15psf was at a significant discount to prime Cardiff buildings and had good prospects for re-letting should the tenant vacate.
The building was priced attractively at a yield of over 10% and the deal was negotiated directly with a well known contact at the vendor (M&G).
Identified pre-purchase that the Charlton site would be of interest to housebuilders as a residential development opportunity and therefore generate a higher value than the apportioned price at purchase of £10.5m.
Negotiated an early surrender of the property from the tenant in return for an early dilapidations settlement. The ability to obtain vacant possession was legally documented and the site was marketed for sale.
The estate was let in the majority to Fuji (c.70% of income) with a range of lease expiries. Bedford industrial stock has been eroded by the increasing demand for residential.
Lack of supply has created upward pressure on rents and less choice for tenants looking to relocate or take new space.
The units were let to high quality tenants on short lease terms at rents of around £7.00 per sq ft.
One unit was re-let after a minimal void at a rent reflecting £11.50 per sq ft and the lease renewed on
the other unit with no void at £11.25per sq ft which had a significant impact on capital value.
