Schroder Real Estate has exchanged contracts to acquire two office buildings in Exeter and Reigate for a combined £27.2m, reflecting a net initial yield of 7.1%. he group has bought The Senate, a 69,000 sq ft building in Exeter, and the 35,000 sq ft London Court in Reigate through its Regional Office Property Unit Trust fund.The Senate is fully let to tenants including law firm Trowers & Hamlins LLP, Reuters and Arbuthnot Latham & Co. The firm paid £15.7m for the office building, reflecting a net initial yield of 7.4%.London Court is also fully let, and tenants include Tesco Underwriting Ltd and Hyundai Capital UK Ltd. The apportioned price paid was £11.5m, which reflects a net initial yield of 6.8%.
Further £130m immediately available
Tom Newman, investment manager at Schroders, said there was a further £130m of investment immediately available for the fund.“The Senate and London Court are modern, well built buildings let to good covenants in locations that have very little grade A office supply and little to no speculative development in the pipeline,” he said.“[The fund] is targeting undersupplied regional office markets by acquiring property offering good fundamentals in target cities and towns with strong and diversified local economies.”Cromwell Property Group advised the vendor; CBRE and Doherty Baines acted for Schroders.