Craigard

Prism

Sold August 2022
Bought For: £3.25m.
Sold For: £5.1m.
The Asset: Detached, Brick-built office premises over three storeys totalling 29.951 sq ft.

Prism was purchased in September 2016, the first acquisition for the portfolio post-Brexit. It adjoins Spectrum – one of Craigard’s other flagship investments, providing opportunity to scale-up and combine the two together.

The purchase price of £3.25million reflects circa 10% net initial yield and £110 capital value per sq. ft.

It was multi-let to six tenants with an annual rent roll of £330,799. There was one vacant suite of circa 4,500 sq. ft.

Following the purchase of the property, Craigard embarked on re-positioning the asset in the market and undertook immediate refurbishment of the vacant ground floor suite and the common areas to improve the image of the building. The main issue with the building was the lack of air conditioning. Having invested, quoting rents were pushed on in-line with the market.

In the early stages of ownership, for reasons outside of Craigard’s control, two tenants decided to vacate, leaving the building only around 40% occupied – this was not necessarily in the plan! Then in 2020, COVID-19 hit at the worst time for the asset. However, against all odds, Craigard managed to
let all the vacant suites within 18 months, bucking the trend of home working which proved the concept of high-quality office space being more desirable to tenants. Not only had Craigard got the building fully-let, but over the hold period had increased the annual rent roll to circa £470,000.

Since the building was now fully let and presenting well, the time came in 2022 to explore a sale which was promptly concluded at a price of £5.1million reflecting circa 8.7% net initial yield. After a six-year hold and having worked through the BREXIT fallout and then COVID-19, investors still saw a fantastic profit out of this asset which is testament to all the hard work that went into it.

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