Summary
Following a substantial re-pricing, BHP acquired the property from a distressed over-seas vendor in conjunction with Milroy Holdings Ltd.
Under the vendor’s stewardship, the property had lacked investment for a number of years and an urgent refurbishment of the communal areas and vacant office accommodation was required to ensure correct presentation to the occupational market.
Given the over-seas nature of the vendor, communication with the existing tenants was lacking and BHP were in a position to capitalise upon this with early lease re-gears and expanded lettings with existing occupiers.
Given the medium term ability of a complete residential redevelopment of the site, which benefits from views of the River Thames and an improving investment market, BHP sold the asset in the Summer of 2013.
Business Case
STRENGTHS
- Very attractive pricing
- Partially income producing
- Site has potential for residential development with views of River Thames
- Good parking allocation
OPPORTUNITIES
- Acquisition from a distressed vendor
- Potential to reposition the building through a communal area upgrade
- Limited supply of competing accommodation in the town
- An opportunity to secure lettings to occupiers of the adjacent serviced office premises
WEAKNESSES
- Building was in need of a substantial refurbishment
- Position is slightly removed from the Chertsey town centre
- Income was compromised by void costs
THREATS
- US $ / GB £ currency fluctuations were threatening to destabilise the purchase
- Void risk