Runnymede council splashes £130m on duo of prime South East offices

By Paul Norman - Thursday, June 07, 2018 15:00

Runnymede Borough Council has bought two prime South East offices for in excess of £130m as it seeks to generate funds to reinvest in regeneration opportunities in its borough, CoStar News can reveal.

Runnymede has bought the Pine Trees complex in Staines in the Runnymede area from clients of Aberdeen Standard Investments for £80.7m.

The five building complex comprises around 110,000 sq ft of offices leased to tenants including Bupa and the United Kingdom Accreditation Service.

BNP Paribas Real Estate advised Aberdeen Standard Investments; Runnymede’s own internal specialist team acted on behalf of the Council.

Separately Runnymede has bought the 101,237 sq ft VW Financial headquarters in Milton Keynes from UK & European Investments for £50.15m or a 4.83% net initial yield.

Runnymede Borough Council was advised by Hanover Green, whilst UK & European Investments was advised by JLL.

Local authorities have notably been one of the most active investors in real estate over the past two years after a withdrawal of central government funding coupled with the April 2016 Public Loan Works Board (PWLB) in April 2016, which saw central government offer low margin loans to local authorities. The two factors have seen real estate emerge as one of the key ways for local government to find new ways to fund services by creating new revenue streams.

Local authorities spent almost £1.9bn on UK commercial property in 2017, eclipsing the previous record high set in 2016, according to CoStar’s investment data.

The trend sees no sign of slowing with CoStar's first quarter investment report recording in excess of £500m of acquistions, the largest of which was Spelthorne Council's acquistion of 12 Hammersmith Grove for £170m, which was first revealed by CoStar News in January.

CoStar's Q1 Investment Report is available to download for clients here.

pnorman@costar.co.uk

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