The Regional Office Property Unit Trust, advised and managed by Schroder Real Estate, has acquired St Patrick’s House in Cardiff city centre for £14,155,000 from Hodge Bank. The price reflects a net initial yield of 7% and a capital value of £281 per sq ft.
St Patricks House, built in 2000, is a high quality office building totalling 51,500 sq ft over ground and four upper floors. The property was recently refurbished to a Grade A specification with three floors totalling 30,500 ft let to Network Rail until 2027. Approximately 19,500 sq ft is currently vacant and subject to a vendor rental guarantee.
Tom Newman, Investment Manager at Schroder Real Estate, commented:
“St Patrick’s House is a high quality office building in a prime location within Cardiff City Centre. We hope to capitalise on good levels of occupational demand to let the vacant space and expect the location to improve further as a result of the redevelopment at Cardiff Station, as well as the longer term mixed use development of the Brains Brewery.
This purchase follows recent acquisitions in Cambridge, Leeds and Manchester and is the tenth acquisition for the Regional Office Property Unit Trust (‘ROPUT’) since launch 18 months ago. ROPUT is targeting assets offering good fundamentals in strong and undersupplied regional cities and towns with £100 million of funding available for immediate investment.”
International property advisers JLL advised Schroder Real Estate. Justin Millett, director of Capital Markets in JLL’s Cardiff office commented:
“2017 was a record year for the letting market in Cardiff with recorded take up of just under 750,000 sq ft. Schroder’s acquisition of St Patrick’s House reflects the good health of the letting market together with strong investor appetite for our capital city. We’re looking forward to letting the vacant, fully refurbished floors to further improve the performance of the asset for our client.”
International real estate advisers Savills advised Hodge Bank. Ross Griffin, Director in UK Investment in Savills Cardiff comments:
“My client was keen to see a successful sale of the asset to Schroders’ following the high quality refurbishment of the building and the successful letting of 60% of the building to Network Rail. My client acquired the building in 2010 in what they viewed to be a strong location for rental growth and an ever improving location with the development of Central Square and now the future development of Central Quay. The asset performed well as part of this business plan and rents in the building increased from £16.50 to £21 per sq ft.”
JLL acted for Schroder Real Estate. Savills acted for Hodge Bank.
