Space in Town is sounding out investors about pooling its serviced office
properties into a fund targeting strong and steady income returns.
would contain the company’s four London freeholds at Waterloo, New Broad
Street, St Pauls and Monument, which are together valued at about £160m.
target investors would be pension funds, family offices and sovereign wealth
funds looking for strong and reliable sources of income.
Fuchs, Office Space in Town’s chief executive, said the idea was spawned from
his family’s experience running one of the UK’s first serviced offices in Northampton, which opened
in 1979 and is still a serviced office today.
37 years since it opened, Fuchs argued the property has delivered far superior
and more consistent returns as a serviced office than it would have done as a
normal office block.
would almost certainly have had half a dozen leases as well as empty periods
between leases, refurbishments and rent-frees,” Fuchs said. “By contrast, we
have refurbished out of cashflow, but we’ve never been empty and never had
ignoring the impact of incentives and voids, he said a fund seeded with its London
properties would offer better income returns than comparable investments. “At
the moment, office buildings in London let for 10 years are changing hands at
circa 4%,” said Fuchs. “We can provide in excess of 6%. Isn’t that a better
that a serviced office fund would also continue to perform in a downturn.
worst-case scenario is that profits flatten out,” he said. “They’re all great
buildings and they’re going to provide very steady income.”
Space in Town’s London properties are currently held in two joint ventures.
this year, Chinese real estate manager KaiLong
replaced Forum Partners’ majority stake in the first venture, which
holds its Waterloo, New Broad Street and St Pauls sites.
remains a shareholder in its second venture, which holds the Monument property.
launch of a fund would provide Forum and KaiLong with an opportunity to exit.
If you are interested in a serviced office please call Gryphon Property Partners on 0203 440 9800 or click on the following link - Office Space