The first office space is Unit 1, Clare Hall, St Ives Business Park. With a floor area of 4,104 sq ft, the premises are currently let and occupied at a rent payable of £50,000 per annum. The price paid on acquisition reflects a net initial yield to the purchaser of 8.3 percent, allowing for costs.
The net initial yield, after costs, on the second property - Unit 2D at Minerva Business Park, Peterborough - is 7.9 percent. This property is a 2,191 sq ft, two-storey building let to two separate tenants and currently produces a rental of £24,000 per annum, exclusive.
Alan Matthews of Barker Storey Matthews confirms that the yield figures are representative of current market conditions but, due to the level of rent passing the capital value, represent a discount to open market value vacant possession.
He adds, "There is an acknowledged hardening of yields in the past 18 months.
With investors struggling to find returns in other asset classes, sentiment in the commercial office property market remains steady enough with a view to rising rents and capital values and a fast-moving lettings market in key locations when properties become vacant."