STENPROP Limited (“STENPROP”), a property company listed on the Bermuda Stock Exchange, with a secondary listing on the JSE’s AltX, has announced the sale of its Chiswell Street asset in London and the purchase of Trafalgar Court in Guernsey.
STENPROP has agreed contracts to dispose of its London based Chiswell Street building for £48 million, representing a premium sale price compared to book value. The decision to dispose of the building followed discussions with tenants which accelerated the redevelopment potential of the building, thereby making it very attractive to developers. This is in line with STENPROP’s stated strategy to steer clear of full scale development projects that typically have a negative impact on earnings during redevelopment periods.
Paul Arenson, STENPROP CEO said: “Chiswell Street reached a point where a full-scale redevelopment opportunity became possible, making the property very attractive to developers and attracting a premium sale price.
“We took into consideration alternative investment opportunities available to us in London, the broader United Kingdom, Switzerland and Germany and made the decision to dispose of the property.
“The profit realised from this sale is pleasing and validates management’s decision to invest in London office properties back in 2009, ahead of a strong market.”
In line with its aim to maintain an optimal balance between growth and income assets in its portfolio, STENPROP announced the purchase of Trafalgar Court in Guernsey for £61.4 million. This transaction will be funded by a £30 million bank loan and available cash. Trafalgar Court is a fully let modern Grade A, multi let office building with good quality tenants. The average unexpired lease period is in excess of 12 years with three yearly, upward only rent reviews.
Patsy Watson, STENPROP CFO, added: “This acquisition fits well with our strategy to purchase earnings enhancing assets with long-term secure lease profiles. We expect Trafalgar Court to deliver a yield on equity invested in excess of 8% per annum from the date of acquisition.”
STENPROP’s key focus is to deliver sustainable earnings and capital growth as well as a growing dividend stream. In the last quarter of 2014, STENPROP concluded transactions which included the acquisition of 45 buildings in Germany, Switzerland and the United Kingdom, as well as their management company.
“We have a strong asset base and an exciting pipeline of prime growth assets with immediate opportunities on a West End London office property and in the Berlin residential market.
“We look forward to increasing our engagements with existing and potential South African shareholders to support our strategy and improve our profile in the market place,” concluded Arenson.
