This article is from the Australian Property Journal archive
The Arlington Business Parks Partnership Fund has sold the Verizon’s 392,000 sq ft complex at Reading International Business Park to overseas clients of RREEF as well as amended to CMBS loan covenants securing the option to extend the loan maturity from July 2012 to July 2014.
ABPP, which is managed by Goodman and operated by Legal & General Property, will retain the adjacent land for Phase III of the Park, which will provide up to 300,000 sq ft of office space for pre-let opportunities.
Legal & General director Paul Edwards said the sale clearly demonstrates that despite uncertain economic times, there is still good demand from investors for high quality out of town office developments and is a resounding endorsement from an overseas investor as to the strong underlying fundamentals that the Thames Valley offers.
Goodman CFO James Cornell said proceeds of the sale reduce leverage and provide certainty that the remaining CMBS debt can be extended, if required, to July 2014.
Utilising these sale proceeds, ABPP will have repaid circa £530 million of the £800 million CMBS issued in August 2007. The resulting financial flexibility places ABPP in a very strong position to deliver enhanced risk adjusted returns.
UK business parks managing director Jim Johnston said this sale will help to rebalance the distribution of assets in the ABPP fund, helping to maintain an efficient capital structure and a strong financial position.
“The proceeds will be recycled as part of an on-going strategy to enhance investor returns and help to facilitate future commercial development opportunities across our 8 million sq ft consented land bank on a pre-let basis.
“We are currently on site with over £100 million of committed development to Centrica at Oxford Business Park, Greater Manchester Police at Manchester Central Park and other opportunities are expected to come forward in the near future,” he concluded.
Strutt and Parker advised ABPP, with the purchaser advised by DTZ and RREEF, the real estate investment management business of Deutsche Bank’s Asset Management division.
Australian Property Journal
