Phase III, Redhills Road

South Woodham Ferrers, Essex

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Summary

Having owned the Freehold for a number of years, BHP acquired the Long leasehold interest from West Property Register (RBS) as part of a wider tripartite transaction by them to extinguish their lease liability.

Having completed the acquisition, BHP collapsed the various Leasehold interests, with BHP now controlling a more traditional structure of Landlord and occupational tenant.

BHP made the decision to capitalise upon the heightened investor demand for industrial assets and instructed Allsop & Co to market their interest. The asset was subsequently sold to Petchey Holdings.

Business Case

Strengths

  • BHP held the key (Freehold) to facilitating West Property Register sale of asset
  • Lack of intensive historic management
  • Attractive pricing due to vendors lease structure

Opportunities

  • BHP owned FH tenure
  • Lease events in near term allow establishment of market ERV’s
  • Strong investor appetite for a sale

Weaknesses

  • Generally poor covenants
  • Very poor quality buildings
  • Resistance to market ERV’s due to historic low rents on the estate

Threats

  • Poor covenants strength
  • Relatively modest asset value may result in a lack of institutional buyers
  • Many leases had schedule of conditions

Location

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