CLS Holdings sells 19 regional offices for £65m
CLS Holdings
83.00p
16:49 26/04/24
CLS Holdings announced the sale of a portfolio of 19 regional offices in the UK for an aggregate cash consideration of £65m to Singaporean investment firm Elite Capital Partners on Monday.
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The FTSE 250 company said the offices are located across the UK outside of the south east and, following major lease re-gears last year, had less active asset management potential.
It said the sale of the portfolio was in line with its strategy of actively recycling its capital and focusing the UK portfolio on London and the south east.
Following the completion of the transaction, CLS said it would hold only two assets in the UK located outside of the south east.
The sales of 17 of the 19 offices, which are held freehold or heritable title, had simultaneously exchanged and completed for £62.1m, the board confirmed.
It said the sales for £2.9m of the remaining two assets, which were held long leasehold, had exchanged and were expected to complete in the first quarter of 2020, subject to the consent of the freeholder.
All the offices were unencumbered at the point of sale.
The portfolio comprised 618,223 square feet and was 97.5% let on fully repairing and insuring leases to various UK government bodies, with a weighted average unexpired lease term of 4.1 years to breaks.
CLS said the portfolio had net rent of £6.5m per annum at an average of £10.62 per square foot.
The portfolio was valued at £66.4m at 30 June, with the sale proceeds representing a small loss of £1.4m or a discount of 2.1%.
However, CLS said it had received more than £3.2m in additional rent from the portfolio since 30 June.
“This transaction is a significant step in implementing our strategy of focusing our UK portfolio on London and the south east office markets, a region in which we remain confident of the long-term prospects,” said chief executive officer Fredrik Widlund.
“We continue to see significant opportunities for acquisitions across our core markets and this transaction will allow us to recycle capital to capitalise on those opportunities.”
At 0811 GMT, shares in CLS Holdings were up 2.18% at 304p.