under bought, page-17

Direct Property Ownership in the UK

Limited to 6 office and one industrial
Looks to be periphery locations, Exeter, Middlesborough etc.

All saints business park
Average stock
Purchase 11/07
Purchase £9.5mil
Latest Val £8.47
Cap Rate (used in valuation)6.25% (this will come out alot further 7%+)
Very long lease term to 2 tenants so assume its geared and it probably provides a positive yield spread still

The Senate
Great A grade building (new build)
Acquired at 19.1 valued at 19.2
Cap Rate 6.33% (may come out)
Building is 61% vacant and has 2 tenants at the moment.,
3600 sqm to let (may be difficult)

Southernhay Garden
1990s build over a number of buildings (12)
PP 24.6 Val 24
Cap Rate 6.48% (will come out 7?)
98% let with a weighted average lease duration 4.6yrs

Melville st
PP 3.9 Val 3.65
Cap Rate 5.64% (will come out alot..)
100% let

Allen Clark Research Centre
PP 17.25 Val 16.25
Cap 6.4%
100% let
WALE 18.2yrs
(good income earner possibly, hold for 5 yearly review)

Markland (JV)building 5-8yrs old
PP 45 Val 45.6
Cap 6.49
100% let
Wale 6.6yrs
(looks nice probably some softening in the yield to come but if they can extend the lease term and weight for the rental uplift they should retain capital value)

Brittania Park
PP 3.5 Val 3.1
Cap 6.41% (will come out)
100%
WALE 14.3
(good long term hold but paid a high price)



All of these were bought at the top of the market and so the prices were full, however most are let for long periods and assuming moderate gearing should be servicing their debt. LVR may be pushed as regular vals continue downward, however I dont think potential breaches with banks will be too harsh.

May have some good news on AUS weaking recently? Probably hedged out though. Could make selling for below cost appealing if they were going to repatriate the money assuming the aus dollar weakens further.