UK local authority fund acquires office at record Midlands yield

The UK's Local Authorities Mutual Investment Trust (LAMIT) has acquired an office complex in Warwick for £16.1 mln (€22.6 mln). The deal reflects a sub-7% yield, which is believed to be a post-crash record for the British Midlands.

The vendor of Iceni Centre office complex at the Warwick Technology Park is Praxis Holdings, a privately owned, Isle of Man-registered property investor.

Praxis acquired the building in May 2013.The Iceni Centre is an institutional-quality office building
totalling 72,270 square foot (6,700 m2) over three floors with 392 surface parking spaces. Key tenants include Alliance Medical, Rolls Royce and Siemens.

Praxis acquired the building in May 2014 and let the remaining vacant space on the second floor to Siemens at a rent of £17 per sq ft - a new record rent for the market and Warwickshire’s biggest deal over the past two years.

Gabriel McLaughlin, head of asset management at Praxis, commented: 'We are pleased to have completed the sale of the Iceni Building at a price that reflects a significant outperformance of our original business plan, two years earlier than forecast. We actively managed the asset over an 18-month investment, refurbishment and retenanting period during which our focus was to strengthen tenant line-up, rebrand the asset, let the vacant space and then exit into a healthier investment market. This is in line with our ongoing investment strategy.”

Finn & Company acted for Praxis, while Joiner Cummings advised LAMIT, an investment platform for all local authorities in the UK and Northern Ireland.

Praxis has acquired over £500 mln of UK commercial investment and development assets since 2009. The company continues to be ranked the top performing UK asset manager when compared to the IPD All Balanced Property index, having delivered the highest annualised returns over a one, three- and five-year period.