As market conditions continue to improve across the South, CBRE has completed on two major investment transactions. On behalf of Aviva Investments, CBRE has sold Leander House on Solent Business Park in Fareham. The freehold property was acquired by Carisbrooke Investments and is let to global security company Northrop Grumman Mission Systems Europe by way of two leases which expire in August 2016 and March 2017. The total rental is £755,000 per annum and the purchase price paid was in excess of the £5.5m asking price.
Solent Business Park is the premier business park on the south coast which benefits from excellent transport links with the M27 corridor and rail networks. The business park was originally developed by Arlington Securities and extends to 130 acres. It continues to expand and once complete will offer over 2.5m sq ft of office space. Designed around a central core Leander House is a modern air conditioned office building totaling in excess of 43,600 sq ft (4,000 sq m) designed in two wings and arranged over ground and first floors. It also has some 230+ parking spaces.
Over the last two years transactional activity on the business park has been relatively quiet, but more recently there has been an increase in occupier activity with a number of active requirements being fulfilled. The most recent transaction saw FDI take 4,500 sq ft of part refurbished, secondary space in 3600 Parkway. A further 5,000 sq ft is currently under offer in the neighbouring multi let office, 3700 Parkway, to two existing tenants on the park for expansion space. Hampshire Police, an existing occupier within the multi let Fusion 1 (c.64,000 sq ft), committed to a further 9,500 sq ft. In addition to this, 13,230 sq ft is under offer in Spectrum, a c.40,000 sq ft office building which was recently purchased with vacant possession.
The wider M27 market has seen encouragingly good levels of activity with almost 65,000 sq ft of office space, in units of 5,000 sq ft and above being acquired during the first half of last year. The largest of these deals saw serviced office operator Arena Business Centres purchase Wessex and Threefield Houses, both located on the south eastern edge of Southampton city centre. In addition to this, Lakeside Business Park in North Harbour, which is another established out of town location, has seen enquiries translate to lettings with 9,000 sq ft let to Warings and a further 12,500 sq ft let to local Portsmouth paper, The News.
Commenting on the transaction, Jon Diaper CBRE Capital Markets Director for the South said: “There was good demand for this investment and the sale demonstrates the increasing confidence in the market for investments with relatively short unexpired lease terms. The increase in confidence in the office market across the south is beginning to filter through in all areas as economic conditions have stabilised in the region generally.”
CBRE has also recently sold PWC’s Southampton HQ, Savannah House in Ocean Village, to Forelle Estates for £2.5m for potential redevelopment once the lease expires in June 2015.
