Royal London Asset Management has brought to market for sale the Pelican portfolio, four offices across 220,384 square feet in Greater London and the South East.
BNP Paribas Real Estate has been appointed to market the portfolio seeking £39.06 million and a net initial yield of 10.25% or a capital value of £177 per square foot. The assets are also being marketed as individual sales.
The buildings are: One Gloucester Place, Brighton, a 37,022-square-foot office being marketed for £12.64 million or a 9.5% net initial yield; Capital Court, Uxbridge, a 57,246-square-foot building being marketed for £7.59 million or a 12% net initial yield; Greenwood House, Chelmsford, a 51,729-square-foot building being sold seeking £6 million or a 10.13% yield; and Sovereign House in Romford, a 74,387-square-foot building being sold seeking £12.83 million or a 10% yield.
The portfolio has a total rent of £4,275,077 a year, reflecting a passing rent of £23.83 per square foot on the let space. There is a weighted average unexpired lease term of 4.24 years to break and 5.65 years to expiry.
The buildings are 78% multilet to 15 tenants with occupiers including the Secretary of State, Manpower UK, Handelsbanken, IBB Law, Kennedy’s Law, Allianz and Daisy Corporate Services Trading.
BNP PRE says there are opportunities across the portfolio to reposition the buildings to alternative uses, subject to planning consents.
Office investor activity in Greater London and the South East is showing signs of stabilising after a severe correction, reports LSH.
The adviser says sentiment indicates that prime yields, reflecting 15-year, secure income, have plateaued at a 15-year high of circa 6.75% during 2024.
Following "very subdued volume" of £264 million in the first quarter, LSH says transactions in the second quarter are expected to recover to circa £450 million, of which some £250 million of stock is earmarked for conversion to residential uses.