Benson Elliot sells UK office scheme to Blackrock for €45m

Private equity real estate fund manager Benson Elliot has sold CBXII in the UK city of Milton Keynes to Blackrock for £35 mln (€45 mln), reflecting a net initial yield of 7.0%.

CBXII is a 150,000 sq ft (14,000 m2) office and retail scheme located on Midsummer Boulevard within the Central Milton Keynes Business District.

The property was acquired by Benson Elliot Real Estate Partners II in 2010, with a view to upgrading the quality of the office accommodation, improving tenant mix and covenant strength and increasing rental levels. CBX II is split over three buildings: Midsummer East, Midsummer West and Midsummer Court.

Benson Elliot has accumulated over £1 bn in UK regional office and retail investments since the acquisition of CBX II as part of its “Reach for the Regions” programme.

Commenting on the firm’s UK investment activities, Marc Mogull, Benson Elliot managing partner, explained that 'the spread between prime London yields and the best of the rest was getting too wide to be justified by fundamentals'. 'People sometimes forget how little new stock has been delivered outside London over the past few years,' he said.

At CBXII, Benson Elliot managed a £4.2 mln refurbishment programme after which occupancy grew to 80%. 'CBXII was Benson Elliot’s first UK investment, and it’s been a great success for our investors,' commented James Jakeman, Benson Elliot principal. 'Having transitioned the asset back to core, the time is right to release the value created.'

Allsop advised Benson Elliot while Blackrock was represented by Tudor Toone.