Spectrum, Solent Business Park - Sold May 2019
In late 2016, after conclusion of the initial business plan, Craigard offered of the investors the opportunity to sell the property or to refinance and hold it because rents before the recession were in the range of £15.00 - £17.00 per sq ft on Solent Business Park. There was no reason, with declining supply, that rents should not recover to that level over the coming years. Given it was newly refurbished, the building was an attractive investment and there were real prospects for further returns.
Investors took this concept on board, although one party was bought out, and the property was refinanced with Santander – raising £3.2million against a then current value of £6million. This allowed investors repayment of their original stakes, rolled up interest of 8% per annum and Craigard was paid part of its performance bonus – reinvesting some of it’s fee as equity in the deal.
Then came Brexit – and although rental growth was coming through it was clear that the occupier market was softening whereas the investment market remained strong. In early 2019 a review was undertaken as to whether to hold the investment further, in the light that rental growth expectations had been moderated. A decision was taken to quietly market the property and a very satisfactory sale was concluded at £7million. Original cost including refurbishment was £2.7m