Praxis, the UK value-add investor, has started the year with the acquisition of two office investments in Orpington and Fareham. In separate deals, Central Court has been acquired for £13.35M from Aegon Asset Management and Fusion 1, 2 and 3 on Solent Business Park for £24.5M from Columbia Threadneedle.
The Fusion deal consolidates Praxis’ ownership on Solent Business Park where they already own three other buildings, and the purchase price of £150psf is a significant discount on the £256psf paid by Kennedy Wilson for the adjacent building just before Christmas.
Having sold 55 assets in the two year period leading up to the pandemic, Praxis says it is now firmly in acquisition mode and the company is reportedly under offer on several other buildings totalling over £100M.
Charlie Arden of Praxis said:
“We have been waiting patiently for the opportunity to deploy significant capital into the market, particularly into regional offices which is a sector that we know and love. We have been tracking several buildings for over a year and pricing is now at a level that looks interesting, particularly on a relative return basis. Offices are clearly out of favour and that sentiment is materialising an opportunity for us to increase our exposure to the sector.
Arden went on to say: “We have seen first-hand in our existing portfolio that there is sustained demand for the right product at the right price point, and we think the regions will ultimately benefit from the shift in working practices. Against all the odds, 2021 was actually one of our best years in terms of leasing up, completing over 500,000 sq ft of occupational deals during the year. We continue to be highly selective in our stock selection, but we are fundamentally convicted on the future of the office sector and we’re going into 2022 with a real appetite to build on these two acquisitions.”
Finn & Company and Irwin Mitchell advised on both transactions.