Case Studies

Our projects normally run for a three to four year business plan. Here are some examples of our successful completed projects:

Linea - Sold March 2016

Linea, Fleet

A modern, three-storey, 22,000 sq ft office building, located on the primary Business Park in Fleet. The property was purchased by Craigard on behalf of a syndication of investors for £2.8m, reflecting a net initial yield of c. 8.25%.

At the time of purchase the building was approximately 75% let. Over a period of 12 months, the premises is now fully let to four tenants (Grass Roots Eventcom Ltd, Anite Telecoms Ltd, Verisk Analytics Ltd and PRMA Consulting Ltd), at a combined rental income of £303,339 per annum producing a running yield of c. 10%.

There were various upcoming lease events, therefore a discussion in respect of a potential sale of the property or to hold the asset in the portfolio took place with investors. It was decided that a sale of the building was the best line of action to cash in on the profit. The property was sold in March 2016 for £3.7million, reflecting a net initial yield of circa 7.75%. The investors secured a total return of circa 50% over a 15-month period.

Flexus, Segensworth, Fareham - Bought and Sold in 2016

The building comprised a dilapidated 30,000 sq ft two-storey Research & Development facility. It was sold by an LPA Receiver on behalf of an owner occupier which went into administration.

Craigard agreed a purchase price of £1.2million for the long leasehold interest where Hampshire County Council was the freeholder.

The head lease held numerous complicated restrictions, which Craigard renegotiated in return for a premium. This included extending the lease term to an institutional standard.

The property comprised two buildings linked together which were in need of complete refurbishment. Craigard’s business plan was to strip the building to a shell condition and then market the property for all opportunities. Craigard was then able to respond flexibly to occupier demands, whether refurbishment to offices, R&D or complete redevelopment for industrial use.

After a short period of marketing, ‘Just Develop It’, a local IT company expressed an interest in purchasing the property for its own occupation. A sale price of £3million was agreed, with Craigard carrying out some enabling works.

The investors secured a return of circa 100% on their investment in just six months. This represents the best return Craigard has achieved to date and will probably remain so for some time to come.

The New Barn (nee Systems House), Petersfield - Sold January 2016

New Barn, Petersfield

This former research and development building extending to around 20,000 sq ft was purchased vacant in January 2014 but was bought alongside Moneybarn plc. Moneybarn had identified the property for its own occupation, but at that time wished to take a lease of the property rather than purchase it itself.

A back-to-back letting was concluded at a rental of £195,000 for a 12-year term, with a tenant break at year seven on payment of a six month rent penalty. As part of the transaction, Craigard invested £300,000 in the building for the installation of new M&E – primarily air conditioning. At the same time, the tenant undertook a comprehensive refurbishment of the entire property, converting it to contemporary offices for its long-term occupation. Investment yield including the capital contribution to the works was 9.65%.

A loan of just over £1million was secured from Santander, with the balance of the £2million total cost raised from investors – primarily those seeking to reinvest from the successful Chippenham project sold in December 2013.

Moneybarn was a local business, well-established in the Petersfield area, which provided car finance for nearly new vehicles through the car dealership network. On purchase, we spent a great deal of time with investors and the management looking at the financials of the business and its future. At that time, the business was coming out of a very difficult recession but had secured venture capital funding from Octopus that had allowed it to grow and hence the need for new accommodation. Our investors backed the business and that judgement call proved well-founded, as last year the company was acquired by Provident Life plc – a major financial and insurance business. Investors then decided that they would cash in their profit and the property was sold in January 2016 for £2.4million – 7.75%. This has shown investors 66% return in two years – part income and part capital profit. A very satisfactory outcome.

Rivermead Business Park, Thatcham - Sold December 2015

Riverbed Business Park, Thatcham

A ten unit mixed business space estate extending to 25,000 sq ft purchased in October 2013 for £1.85million, with a £1million loan from Santander plus investor cash.

The estate is well-located immediately next to the railway station and with a prominent main road frontage. It comprises small office and warehouse units attractive to local businesses. Initial yield was 9.5% with scope to drive the return to 11% per annum on letting of the four vacant units. Purchase price represented £75 per sq ft – a little more than the cost of new build.

At the time of purchase there were five lease renewals outstanding, all of which were subsequently concluded. Three new lettings were secured following refurbishment of the vacant space (unfortunately although not entirely unexpected, we lost one tenant due to business failure). The last two vacant units were in legals for new lettings, at which point through our agency contacts we received a strong off-market offer of £2.5million from a specialist buyer.

Investors decided to accept after some considerable debate. The offer reflected the enhanced income stream we had achieved, the improved building fabric through the refurbishments undertaken, but also yield shift which we had anticipated at the time of purchase. Investors have achieved an annual return of about 25% over the two years of ownership. We have worked very hard for our bonus!

Eaglepoint, Junction 9 - M27 – Sold December 2013

Eagle Point is a Grade A landmark office building constructed in 2005. The building totals just under 30,000 sq ft on three floors with an excellent parking ratio of 1:275 sq ft.

Upon completion, approximately 50% of the space was let to a government body on a full institutional 15 year lease at £19 per sq/ft. The developer then struggled through the following recession to find a tenant for the remainder of the space and fell into Receivership.

Craigard identified an opportunity to acquire the building at a price of £3.1million, secured a banking offer from Santander of £1.84million and raised private equity of £1.5million. The price equated to about £105 per sq/ft c.f. a new build cost (excluding site fees, finances etc.) of £125 per sq/ft. The initial yield netted to about 8% after non-recoverable void property costs.

The initial business plan was over three to four years, however lettings were concluded inside eight months and the property was sold just under one year after purchase at £4.627 million to Threadneedle.

Investors received a return of 75% inside twelve months. This was a combination of good judgement and good fortune. This figure will never be repeated!

Meyer Timber, Bumpers Farm Industrial Estate, Chippenham – Sold December 2013

Craigard became aware of an off-market opportunity to acquire a 50,000 sq ft vacant warehouse building in Chippenham.

Meyer Timber Ltd, wished to take a new lease at £220k pa for a fifteen-year term simultaneously with the purchase of the then vacant building. The tenant wished to undertake comprehensive refurbishment of the building and hoped that by buying alongside a professional investor, sufficient capital could be raised from the ‘joint venture’ to finance the works.

Craigard secured debt through Santander of just under £1.5million and raised equity from eight investors, totalling £1million in order to conclude the purchase.

Investors enjoyed and income stream for a running yield of 9% until the property was sold for £2.93million after two years of ownership at 7.07% to Mayfair Capital. Investors saw a total return of approx. 65% over two years.