18 Jan 2016
Asset management success leads to Berkshire asset sale ahead of the main portfolio MStar JV exit
London, 18 January, 2016 – The Berkshire asset, acquired by MStar in July 2013 for £1.37 million (£49psf), consisted of a small Thames Valley multi-let industrial estate of 10 units totalling 24,533 sq ft. The estate is located on the east side of Thatcham off Pipers Way.
On acquisition the asset was 62% vacant and producing only £52,330 per annum. The estate was fundamentally in good condition and in a good location but had been neglected by the former owners.
M7 identified a significant price variance between the acquisition price and owner occupier values and that total receipts could be maximised via a break up strategy. Target exit pricing was set at £77psf which would have realised circa £1.89 million.
Towards the end of 2015 the final two units were sold successfully completing the break up strategy. All the units were sold to local businesses who have taken occupation themselves confirming a strong level of owner occupier demand. The total proceeds received equated to £84 psf (close to £2.1m) , circa 10% above business plan and generating an equity multiple in excess of 2.3.