Last checked at 4 Aug 2010 07:00
Release date: 4 August 2010
Embargoed until: 07:00
CLS HOLDINGS PLC RETURNS TO LONDON MARKET
AND ACQUIRES APEX TOWER, HIGH STREET, NEW MALDEN
FOR £21.46 MILLION INCL. COSTS
CLS Holdings plc ("CLS") announces today that its wholly owned subsidiary, Durnvale Limited, has exchanged contracts to buy Apex Tower, High Street, New Malden for £21.46 million including costs. Apex Tower is located on the opposite side of the High Street to CI Tower, which is also owned by a CLS subsidiary.
Apex Tower consists of 15 upper floors of offices (9,185 sq m / 98,869 sq ft), four retail units and a public house at ground floor level (1,265 sq m / 13,618 sq ft) and a four storey car park at the rear. It is fully let save for one retail unit (74 sq m / 798 sq ft) which is under offer and in solicitors' hands.
The building produces £1.86 million income p.a., of which 94% is from BAE Systems which has a lease on the whole of the offices expiring in June 2020. The retail tenants include Tesco Stores and William Hill Organisation. The net initial yield to CLS is 8.66%.
Sten Mortstedt, Executive Chairman of CLS, commented:
"We are delighted with this acquisition which provides an excellent long-term income stream from blue-chip tenants together with a number of short and medium-term asset management opportunities. It continues our focus on owning cost effective offices, which generate reliable cash flow.
Apex Tower marks CLS's first acquisition in the London market since 2006. We believe that there are now selective opportunities for well financed purchasers with strong balance sheets. The rush to buy commercial property by institutional investors at the start of the year has subsided, leaving a more sensible and settled market closer reflecting its fundamentals."
The vendor, The Palmer Active Value Fund II, concluded a lease re-gear with BAE following acquisition in 2006 and also secured a letting to Tesco in 2008. Savills represented CLS and Knight Frank and BNP Paribas advised the vendor.
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For further information, please contact:
CLS Holdings plc Sten Mortstedt, Executive Chairman +44 (0)20 7582 7766
Henry Klotz, Chief Executive Officer
Richard Tice, Deputy Chief Executive Officer
Kinmont Limited Jonathan Gray +44 (0)20 7087 9100
Smithfield Consultants Alex Simmons +44 (0)20 7360 4900