Benson Elliot has lined up Wells Fargo and LaSalle Investment Management to finance the £132m acquisition of a business park and a shopping centre which formed the bulk of the Bentley portfolio from Legal & General Property.
Benson Elliot’s £132m purchase price reflects a 7.1% net initial yield, based on an annual income of £9.7m across the two assets, which span circa 450,000 sq ft. Contracts exchanging last week.
Wells Fargo and LaSalle are expected to provide senior and mezzanine finance, respectively, at a loan-to-cost (LTC) of up to 75%, which would implies a potential financing package of up to £99m.
The exact size of the two loans securing is still to be finalised.
Legal & General Property (LGP) acquired the Guildford Business Park in and The Meadows, on behalf of its UK Property Income Fund, for a combined price of £111.3m in 2010 and 2011.
Guildford Business Park, comprised of five office buildings, was bought from the Crown Estate, which held the asset for 23 years, for £55.2m in June 2010. Tenants including Colgate-Palmolive, Ericsson and Philips and has an annual rent of around £6.1m.
Benson Elliot is expected to seek to increase the weighted average rent per sq ft for the business park which is under rented relative to rental growth seen elsewhere in the South East.
Meadows Shopping Centre, which contains 39 retail units over 200,000 sq ft and is anchored by Wilko and BHS, was acquired from Lend Lease for £56.1m in 2011. Annual rental income is around £3.6m.
Situated over eight acres with significant waterside frontage, the scheme will benefit from proximity to the 300,000 sqft mixed use Bond Street development anchored by John Lewis and Cineworld.
Across both assets, Benson Elliot has around 90,000 sq ft of space to let in two markets, Guildford and Chelmsford, where supply of grade A space is limited.
James Jakeman, principal at Benson Elliot, said: “Over the past five years Benson Elliot has established substantial office and retail investment and development programmes across London’s commuter belt. This acquisition is well aligned with the firm’s core competencies and we believe the two assets offer further value as the ripple effect of growth in Central London spreads outward and gathers momentum.”
Charlie Walker, fund manager to LGP’s UK Property Income Fund, added: “Having acquired the Guildford and Chelmsford investments earlier in the cycle, we have reached early conclusion of the active business plans and secured an opportune and timely exit that allows us to return strong value to our investors.”
L&G was advised by JLL and Tudor Toone, and Benson Elliot was advised by Montagu Evans and Jackson Criss. Cube Real Estate has been appointed asset manager by Benson Elliot.