Singapore’s CapitaLand has entered into an agreement to buy Arlington Business Park in Theale near Reading from Patron Capital and APAM for £129.3 million.
In a statement the group said the acquisition will “expand CapitaLand’s assets under management (AUM) in Europe to S$4.8 billion, further strengthening the Group’s investment portfolio in the developed markets”.
The business park comprises 11 Grade A office buildings totalling about 367,000 sq ft of net lettable area.
Mr Jason Leow, president, Singapore & International, CapitaLand Group, said: “The acquisition of Arlington Business Park is part of CapitaLand’s plan to increase our investments in developed markets such as Europe, Japan and the USA. Our strengthened presence in Europe will enable the Group to maintain a balanced portfolio between emerging and developed markets. Post integration with Ascendas-Singbridge, we have acquired strong expertise in business parks. We can leverage this deep experience and our strong network of tenants to value add to Arlington Business Park. As we build up our portfolio in Europe, we have greater optionality in spinning off such assets into investment vehicles or partnerships, continuing to deliver value for our stakeholders.”
Patron and APAM bought the park near Reading from Goodman and Legal & General’s joint venture Arlington Business Parks Partnership, for circa £75m, reflecting an 8.7% net initial yield, in 2015.
The assets sold then at Arlington Business Park comprised 435,000 sq ft of offices with circa 100,000 sq ft of vacancies. The annual rent roll was £6.8m. The duo, with APAM as minority investor, has subsequently leased up space and added amenities and wellbeing improvements.
It has completed a comprehensive asset management programme, including the extensive refurbishment of four buildings, the implementation of new amenity facilities including a café, gym and a floating pavilion on the lake, and other park improvements including landscaping, signage and lighting.
Patron Capital and APAM have completed more than 25 lettings across 248,000 sq ft of space, including to Veritas Technologies, Honda, NTT Security, Synopsys, Amazon UK Services and Willis Towers Watson, achieving a new headline rent of £32.50 per sq ft.
Keith Breslauer, managing director of Patron Capital, said: “We acquired Arlington Business Park with a clear strategy to drive value and reposition it as the leading office park in the Thames Valley. Within five years we have attracted major global businesses such as Honda and Veritas, increased occupancy, passing rent and lease terms and successfully executed our strategy and exiting the asset. This sale is a strong endorsement of our team’s ability to identify opportunities and create meaningful value for our investors.
“The UK has always remained an attractive place to do business, and with the renewed sense of certainty brought on by December’s general election, we anticipate investing substantial equity from our latest flagship Fund VI in the UK in the months to come.”
Chris Taylor, executive director of APAM, said: “The asset management we have completed over the past five years has reinvigorated Arlington Business Park, and we are pleased to have assisted the team at Patron Capital deliver outperformance to their investors, We are very proud of our achievements, not only in the value accretion since acquisition, but also in the feedback we have received directly from occupiers on the quality of the working environment we have created. Arlington Business Park has undoubtedly been re-established as one of the best modern workplaces in the Thames Valley.”
The acquisition will continue a notable upturn in Singaporean investment in South East offices this year, and a strong start to the year for all office investment across the region.