Units 10-14, Pipers Industrial Estate, Thatcham - Sold March 2018
This investment comprised a terrace constructed in the 1980’s of traditional portal frame split into five units totalling 31,035 sq ft, and producing a rental income of £143,000 per annum.
Craigard agreed a purchase price of £2.255million for the investment producing a net yield of 8.25% with a capital value of £72 per sq ft – about new build cost. The debt was secured with Lloyds Bank.
This was the first purchase for the ‘Craigard Select’ model, targeting steadier, longer-term income streams with slightly lower returns rather than the more traditional Craigard ‘value-add’ opportunities.
The property on purchase was let to four different tenants. The one vacant unit of circa 6,500 sq ft was refurbished and let to Bristol Ambulance at £7.00 psf and set a new tone for the estate.
The units provide traditional industrial/ warehouse space comprising clear span warehouse with smaller office content and a good sized loading apron. Craigard was putting together a medium term refurbishment programme on the estate for the benefit of its tenants but an opportunist exit was secured at a very handsome price. The new rental level saw the asset jump in value to c. £3 million in just 15 months. An opportunity arose to sell to an adjoining institutional owner at £3.3m – a 5.35% initial yield. At this astonishing price investors decided to sell having secured a 64% return in 18 months.