LGIM Real Assets buys Basingstoke office block

Abstract Securities has sold The Florence Building in Basingstoke to LGIM Real Assets on behalf of its Limited Price Inflation Income Property Fund for £29m, reflecting a yield close to 4%. The sale followed the leasing of the entire five-storey 61,415 sq ft office block to the Sovereign Housing Association for 20 years. It will become the housing association’s new central services hub. Mark Glatman, chief executive at Abstract Securities, said: “Once again we have seen potential in a market which has been long overlooked, but where the fundamentals are good, and where there is a large catchment of skilled labour. “We have delivered a new Grade A office building, attracted good occupier interest, and agreed a sensible leasing structure, which provides value for all concerned at a substantial discount to office rents in the South East.” Derek Gilby, senior fund manager of the LPI Income Property Fund, added: “This is an excellent buy for the fund, offering a secure long-term income stream off a low base which provides a hedge to inflation and strong underpin to the investment. We continue to seek public sector deals with long let assets and investment grade covenants for the fund and will remain active in this market.” The Florence Building was designed by TP Bennet and completed in July last year. It was marketed at rental levels up to £28.50 per sq ft. Savills and RARE were the letting agents on the property, while Clarke Willmott acted for Sovereign. DTRE and Clifford Chance acted for Legal & General in the investment acquisition, while Pinsent Masons acted for Abstract. To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette