A Few of Our Current Projects

Over the past three years, Craigard has successfully used Druce’s Trust For Sale Syndication structure to make selective, opportunist property acquisitions, using High Net Worth investor cash with bank debt (when available). Co-investment to date has come solely through recommendation and word of mouth. All of this achieved coming out of one of the toughest financial climates in recent times.

Here is an outline of a few current projects which illustrate our mode of operation and the style of project we undertake.

Bordage House - Purchased October 2017

Bordage House, Guernsey

The building comprises 12,207 sq ft of good quality office accommodation with a small boutique retail unit on the ground floor. The price paid was £3.7million, representing a 7.5% initial yield.

The property has been acquired under the Craigard Select model and is multi-let to four tenants including ABN Amro Bank, all on long leases. The weighted average unexpired lease term is over nine years – a very attractive off er given that there are also three-yearly RPI rent reviews.

The building was completely rebuilt behind the original façade in the late 1990’s and the various tenants have invested further money in the last year or two undertaking various improvements and refurbishments.

The quality of the tenants and the long leases combined with the quality of the building represented a very solid offer. The pricing is also very favourable compared to a similar building in say Southampton where the investment yield would be probably around 6% - about 25% more expensive in value terms. All round a good investment for the medium term.

Since purchase, we have added £30,000 or so to the income stream by securing a one year letting of the small ground floor suite. This will be refurbished when the space is vacant again next year.

Watts & Co acted for the seller.

Sherwood Park - Purchased April 2016

This investment comprises two, two-storey detached office buildings constructed on the 1990’s of steel frame construction with pitched roofs comprising 52,161 sq ft.

Fountain House is a single let to the Highways Agency for 10 years, with a break after five years, the tenant took occupation prior to its purchase as were undertaking complete refurbishment of the building.

Waterfront House was multi-let to three tenants, E-on and The Secretary of State have since vacated, dilapidations claims have been successfully instigated as a result of which the suites have been refurbished. There is good interest in the vacant space which is now “Best on the Park”.

The purchase price was £5,050,000. The property was purchased on behalf of a syndicate of investors at a net initial yield of circa 10% with a capital value of £100 per sq ft. Debt was secured with Santander.

The buildings are located on Sherwood Park, a prime out of town office park for Nottingham comprising 600,000 sq ft of office accommodation, providing excellent road links.

The business plan is slightly different to the normal “value add” Craigard syndicates – seen as a longer term “cash cow” due to the limited growth expectations for the asset but a multi-let nature giving a 10% per annum return.

Prism - Purchased September 2016

Prism

Prism was purchased in September 2016, the fi rst acquisition for the portfolio post-Brexit. It adjoins Spectrum – one of Craigard’s other investments.

The purchase price was £3.2million with circa 10% net initial yield at £110 capital value per sq ft.

The property comprises detached brick built office premises constructed in 1991 totalling 29,591 sq ft.

The building is multi-let to six tenants over ground and first floors with one suite of circa 4,500 sq ft vacant on the ground floor.

The current annual rent is £330,799 per annum.

Following the purchase of the property, Craigard undertook immediate refurbishment of the vacant ground floor suite and the common areas to improve the image of the building. The vacant suite now has highly efficient LED lighting and a state-of-the-art heating and cooling system, subsequently reducing a potential tenant’s overall occupational running costs.  Unfortunatley, since purchase two tenants have vacated but the available space has been refurbished and is being marketed aggressivley.

The asset is a medium to long-term hold as it is felt that there is growth in the current rental levels and yield shift once full occupancy is achieved.

Above Bar - Purchased September 2013

11-13 Above Bar

17 Above Bar

The property was acquired at an initial yield of 13.4% due to the fact that the tenant was not a major covenant and had a break in 2016 – which in practice they did not exercise.

The top floor fl at was also derelict which has now been refurbished and re-let along with the first floor on a new 15-year lease. The ground floor lease renewal is due in 2020 and the plan is to hold the asset for income and capital growth until that point.

11-13 Above Bar

Consolidating holdings in this locality and acquired as a separate syndicate, this property is split into two separate retail units constructed in the 1960s. Purchased for £1.9million, the price reflected an initial yield of 11.9%.

Santander vacated their unit on lease expiry in 2019. The space is in the market to be re-let. A very good lease renewal was settled with Yorkshire Building Society who now remain as a solid long term tenant for the next 10 years.

Current rental income is £238,725 pa.

 

Northgate Darlington – Purchased December 2013

An opportunist buy inside two weeks of a property that failed to sell at auction, these three retail units are directly opposite Marks & Spencer's, and were acquired for £1.05 million at a 12.75% initial yield. Tenants are Macdonalds, British Heart Foundation and YMCA on a temporary let.

Lloyds provided £500K of debt, with the remaining balance coming from investors.

In the first couple of months of ownership a deal was agreed to relocate British Heart Foundation at an improved rent on a 10 year lease term. Works were then completed to enhance the appearance of the building.

MacDonalds exercised a break in 2016 and a dilapidations claim has just been concluded. Marketing of the vacant unit has suffered due to a very lack lustre northern retail market. The small kiosk has been let to a local ice cream company.

Negotiations are in hand to acquire land to the rear of the site for residential development which will also include the upper parts of the retail frontage.