Charlotte Place in Southampton has become one of the most desirable office spaces in the city for businesses – Now the building has a new owner as well.
Kingsbridge Estates has continued its recent acquisition spree with the purchase of Charlotte Place in central Southampton from Columbia Threadneedle Investments.
Nine-storey Charlotte Place comprises an 80,000 sq ft multi-let office investment with a current vacancy level of 22%.
Kingsbridge paid £14.1m, which reflects an initial yield of 7.10% (after the expiry of rent-free periods) or £176psf with an average of four years income.
The deal followed the completion of a letting to professional training services provider BPP, on a 10-year lease of 5,258 sq ft. BPP relocated from multi-storey office block Grenville House, a building earmarked for mixed-use conversion and opposite Southampton Central railway station.
Kingsbridge intends to invest in Charlotte Place by extending and upgrading the reception area, increasing amenities in the building and dividing space into smaller suites to let on flexible terms.
The latest acquisition is in line with Kingsbridge’s strategy to acquire multi-let offices in strong South East centres where there is potential to add value.
This runs in parallel with the company’s strategy of developing industrial estates in the region, with current south Hampshire schemes at Segensworth and Havant.
Only two offices are available to let at the 80,000 sq ft development, which was constructed in the mid 2000s – 12,000 sq ft on the fifth floor and 6,000 sq ft on the first floor.
Vail Williams acted for Kingsbridge and Columbia Threadneedle Investments were represented by Knight Frank.
Chris Fry, Chief Executive of Kingsbridge Estates, commented: “We have exciting plans to reposition Charlotte Place in order to capture demand in a market where there is no competing new-build stock and a dwindling availability of grade-A offices.”
Russell Mogridge, Partner at Vail Williams’ Solent region, said: “Supply and demand is very much at the fore here – there is a little high-end office space available in central Southampton.
“This situation is likely to become ever more acute because there are no speculative buildings in the pipeline and offices of a lesser quality are being removed from the market through permitted development rights, with commercial space turned into residential or student accommodation.
“Given these dynamics, along with corporate demand for high-quality offices with co-working spaces, break-out areas, natural light, city centre leisure accessibility and public transport links, Charlotte Place is well positioned to deliver attractive yields and capital growth over the long term.”
Jurys Inn Southampton, an on-site hotel with an in-house bar and restaurant, is not part of the acquisition deal.