09 May 19 by Mike Oldrieve
Commercial property investment opportunities in Devon
Active investors targeted Plymouth offices on the advice of Vickery Holman’s Investment Department.
The commercial property investment market is a specialised area and a lot of the best deals are all about timing. At the beginning of 2015 the office market was still struggling and not popular with investors. As a result, a number of properties were looking significantly undervalued and Endurance House, Parkway Court, Plymouth was one such property. Let in its entirety to solicitors Lyons Davidson for 15 years it was acquired for £870,000 reflecting a net initial yield of 8.48%. What a difference six months can make in the commercial property investment market.
Situated in one of Plymouth’s premier out of town office locations, Parkway Court sits alongside the Ibis Hotel and fronts the main A38 Devon Expressway.
The building was constructed in the early 1990’s and provides 6,654 sq.ft. (618.13 sq.m.) of offices over two floors and has 30 dedicated car parking spaces within the estate. The building has the added attraction of flexibility with the capability of being divided into three separate terraced buildings.
The 15 year, full repairing and insuring lease expires on the 31 October 2024 and provides a current rent of £78,300 per annum exclusive which is reviewable every five years. Lyons Davidson have sub-let part to Westcountry Housing Association Ltd.
Acting for a local private portfolio, Vickery Holman negotiated the purchase by carrying out all necessary investigations and working with the clients solicitor through to completion. The purchase price of £870,000 reflected a net initial yield of 8.48% allowing for normal purchasers costs of 5.8% which is an attractive yield for what is nearly ten years’ income.
The acquisition of a commercial building such as this calls for a wide range of skills within VH, including:-
• Landlord and Tenant
• Building Surveying
• A review of the businesses involved
• A detailed knowledge of the investment market