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Craigard Make Two Acquisitions in a Week

by admin
19 October 2018

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Craigard has acquired Imperial House in Southampton and the International Tin Association Building on Curo Park in St Albans – both within a week. These two acquisitions are at the opposite ends of the risk profile and demonstrate the diversity of the Craigard Business Model. But each have considered business plans to appeal to differing investor aspirations.

Imperial House is a modern office building extending to 14,000 sq ft. It is largely vacant with only a single tenant in occupation of about 25% of the floor area. There is a good level of car parking. Craigard plan to upgrade the air conditioning to a modern heat recovery system and make other general improvements including shower and cycle facilities to the building at a cost of approaching £400,000. Along with general cost running savings the efficiencies of the system will significantly reduce the service charge for the building and therefore its desirability to occupiers.

Located at the top end of town, Imperial House is very convenient to bus routes, car parks, the railway station, Courts and the city centre facilities of London Road and the City Centre. The floor plates are very attractive to the local market being between 781 sq ft and 4,026 sq ft or any combination.

David Foster commented: “The supply side is generally quite low in Southampton City Centre so although this is quite a high risk acquisition the considered view is the space will let and that the success or failure of the financial appraisal will simply be a factor of the time to let and rents achieved and we have very sensible assumptions in this regard. With the improvements we plan, the total occupational cost to any tenant is highly competitive.”

In contrast, Craigard’s off-market acquisition of the International Tin Association building, an 18000 sq ft warehouse at 3 Curo Park in Frogmore, just south of St Albans, represents a solid measured and considered buy of good quality South East real estate. A sale and lease-back for 10 years at £178,000, the building has been acquired at a price of £2.5m – about 6.7% initial yield, which Paul Foster said, “is very attractive in the current market. That said, there were a lot of legal and financial issues to overcome and the transaction took the best part of a year from start to finish. The acquisition sits within the Craigard Select Brand where investors are seeking a modest income without great capital risk. In the medium term given the locality and nature of this modern industrial property there are excellent prospects for mid-term capital growth.”

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