The RO announces that they have completed the purchase of West Park House in Southampton from Lanyon Quay Ltd for a total consideration of £4 million. West Park House occupies a prominent location within the City Centre, on the corner of Cumberland Place and Bedford Place, in the established central business district and overlooking Watts Park to the front.
This is the second major acquisition the RO has made in Southampton following the purchase last year of Waterside Place located on the harbour front and a short walk from West Quay, adjacent to Royal Pier which has been earmarked for significant redevelopment and regeneration. Both acquisitions were made through the RO’s wholly owned subsidiary RO Real Estate, which acquires and develops commercial property assets on behalf of the Group.
Recent research by CBRE reveals City centre availability currently stands at 7%, or 300,000 sq ft, which equates to just one year’s office supply which is low for a commercial centre the size of Southampton. West Park House is well situated to capitalise on this trend and is currently let to a leading firm of local solicitors, Paris Smith, as well as specialist advisory firm The Health Insurance Group.
Originally constructed in 1996, West Park House is arranged over 1,630.43 sq m (17,550 sq ft) over ground and three upper floors with a secure basement car park with 21 spaces. The £4 million acquisition price reflects a net initial yield of 7.6%. RO were advised by CBRE.
Commenting on the acquisition Nick Moore, Senior Investment Manager, RO Real Estate said:
"The acquisition of West Park House is an excellent example of the type of investment opportunity we are looking for in the £2 to £7 million acquisition size. Moreover it highlights our corporate philosophy of being in business to do business and shows the value of establishing committed and enduring relationships with local agents who have strong local knowledge.
The property has prime asset fundamentals providing good locational and income diversification to our other Southampton asset. This is a City which is a recognised strong performer and should deliver strong rental growth. Hampshire and its neighbouring counties remain an important geographic focus for the wider RO Group. As well as commercial property we also have a number of residential developments through our sister company Metis Homes."
RO Real Estate and its various sister companies are wholly owned subsidiaries of the RO which is a family owned group of companies established in 1932. The RO has always invested in a diverse range of interests which today embraces commercial property, housebuilding, holiday lodges and financial services.
RO Real Estate, the commercial property division, has built over 1.1 million sq ft to date and currently manages over 1m sq ft of office, industrial, retail and hotel accommodation. All acquisitions are funded through its existing cash resources, meaning that it is able to move quickly if the appropriate investment criteria are met.