Palace Capital has purchased 22 Market Street, an office building in the centre of Maidenhead, Berkshire for £10.25 million reflecting a net initial yield of 6.83%.
The newly acquired property which has an Energy Performance Certificate rating of B has recently been comprehensively refurbished and comprises 21,852 sq ft across three floors.
It is fully let on a 10 year lease, from August 2021 with a tenant break option at the end of the 5th year, to a subsidiary of Hong Kong listed Techtronic Industries which has a market capitalisation of £26 billion, delivering an annual rent of £718,475.
Two small retail units on the ground floor bring the total net income from the asset to £747,374 per annum.
Palace Capital said the acquisition is in line with its disciplined investment strategy focused on good quality regional towns and city centres that are easily accessible and close to public transport, as well as the amenities that employees are keen to have near their place of work.
According to the company, set in the Thames Valley between Reading and Slough, Maidenhead is in an affluent area of the south east, well connected to the UK’s motorway system and Heathrow airport, making it an attractive location for international businesses looking for space close to London. Like many towns and cities outside of the capital, it has experienced a reduction of good quality office space alongside rising demand.
Neil Sinclair, Chief Executive of Palace Capital commented, “The Thames Valley is home to a host of global, blue chip companies and is a high demand location because of its accessibility; but despite this, in common with the trend we are seeing across the UK, office space availability has reduced significantly over recent years. Maidenhead is on track to benefit not only from the opening of the Elizabeth Line in 2022, with fast access to London Heathrow, the City, Canary Wharf & West End, but also the nearby Nicholson Quarter mixed use development, where construction is expected to commence in 2023.
“We are highly selective when identifying potential opportunities, particularly in this market where value is very difficult to access, and we are therefore very pleased to have been able to embark on recycling the disposal proceeds with this exciting investment.”
