BE Offices, a well-known serviced office provider has recently completed the sale and leaseback of its office buildings at Wembley and Royal Exchange. The total cash payment is estimated at around £50m.
Located on Olympic Way, the Wembley office is close to Wembley Park underground station. BE originally purchased the property on the 105,000sq ft office block in 1998. Only 20,000 sq ft of the building is currently in use as a serviced office centre, while the rest of the space is rented out on a variety of leases.
The building has been taken on a short term lease until September 2018. BE will be searching for similar space in Wembley, as there is still strong demand for Serviced Offices in the local area. The sale brought revenue of £35.5m for the company.
Acquired by BE in 2004, another office centre at No 1 Royal Exchange Avenue in the City is a grade II listed office building, comprising of 13,000 sq ft stretching over six floors. BE has completed a sale and leaseback on the freehold worth £14m, and taken it back on a 15-year lease.
Assets generated will be used to minimise debt, annex more central London office buildings and further expand the menu for customers. This event comes as a follow-up to BE’s acquisition of four new centres for £9m in July 2016, which took its total to 17, thus giving them a presence in the West End and Canary Wharf – a first for the company.
David Saul, BE’s managing director, gives some insight on the decision: “We have taken the opportunity to release a substantial amount of cash that will be reinvested in taking the business to its next level.
“Having successfully integrated the four centres we acquired last summer we feel the company is ready to expand further, especially within the Central London market where demand for flexible office space is very strong.
“In the meantime, clients at Wembley will continue to receive the high level of service that they have become accustomed to as we look for an alternative building, up to 25,000 sq ft, that will enable us to maintain our presence in this vibrant business community.”
BE has raised £67.2m from four sale and leasebacks over the past two years while also trying to readjust its portfolio and offer, including the Threadneedle Street office centre, where a £2m renovation project has just been concluded. As of October 2016, the company reported an annualised income growing up to £36m.