Tue, 12 Nov 2019
Real estate investment trust McKay Securities has bought Rivergate, a multi-let office building fronting Newbury Business Park, for £15.5m.
The purchase price reflects a net initial yield of 7.5 per cent prior to adjustment for the value of letting incentives.
Providing 61,385 sq ft of lettable space over three floors and with 323 car parking spaces, the property is fully let to six occupiers including Capita Business Services, Cavendish Nuclear and Coffin Mew.
Rivergate has recently had a comprehensive refurbishment to the reception, common parts, first and second floors and the contracted rental income of £1.29m pa represents a low rental value of £21.40 psf.
Newbury appeals to a range of occupiers, but suffers from a limited supply of modern office space.
McKay, headquartered in Reading, has a long track record of owning and investing in towns in the Thames Valley and along the M4 corridor.
McKay chief executive Simon Perkins said: “Rivergate is one of the best office buildings in Newbury and has proved its appeal to occupiers with recent lettings all at, or in excess of, 10 years.
“The building stands in good condition with limited capex requirements and will provide shareholders with a high yield and long income.
“Its low rental level relative to the wider market and the potential to add area and refurbish the ground floor provides plenty of scope for future growth, complementing other value-enhancing opportunities across our wider portfolio.”