The New Barn (nee Systems House), Petersfield - Sold January 2016
This former research and development building, extending to around 20,000 sq ft, was purchased vacant in January 2014 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.
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 in total cost raised from investors – primarily those seeking to reinvest from a 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, Craigard 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. Investors backed the business and that judgement call proved well-founded, as in 2015 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.