Private equity real estate investor Henley has completed the freehold sale of Avalon House, to a South African investor for £4.5 million. The sale represents a major milestone for the private equity real estate firm, having now completed 19 exits since its inception in 2006, at a total of around £200 million.
Located a mile north of Milton Keynes town centre, Avalon House comprises 30,284 sq ft of high quality office accommodation split into two wings around a central reception, in addition to 90 car parking spaces. Built in the 1980s, the property initially consisted of office space and a warehouse in the north wing.
Henley agreed the sale at a yield of 8.5 per cent and representing a deal IRR of around 10 per cent and cash multiple of 1.4x Established in 2006, Henley currently has an average deal IRR of over 50 per cent.
Commenting on the sale, Ian Rickwood, Chief Executive Officer of Henley, said:
“This sale represents a pragmatic step in managing investors’ money. Whilst we had expected to deliver a higher return more in keeping with our performance, we felt that there was no guarantee that we could deliver the asset management initiative intended and therefore it made sense to bank a profit and move on to more attractive value add opportunities. The deal marks a noteworthy milestone for us as a firm. Our total all deal return continues to stand at more than 50% per cent, having now successfully carried out 19 disposals. Whilst we remain open to opportunistic acquisitions in the commercial sector, we largely expect to continue our focus on the sales side and would anticipate at least a further two exits this year.”
Avalon House is let in its entirety to marketing services group P&MM Ltd, which was recently acquired by Sodexo, the 18th largest employer in the world, on a full repairing and insuring lease until October 2020. Woodlands Business Park is located adjacent to the site and is home to occupiers including RAL Ltd, Wincanton Holdings Ltd, ED White, Your Cash and Zenith Staybrite Ltd.
Cushman & Wakefield acted for Henley and Farmer Real Estate Ltd for the purchaser.
