Aviva Investors has obtained the initial phase of Abstract Securities’ redevelopment of Bristol Business Park for £30m
The deal was finalised through the Lime Property Fund, which is a secure income, long-lease property fund managed by Aviva Investors.
The property will be redeveloped into an 85,790 sq ft modern office building, which has been pre-let to Babcock Integrated Technology Ltd.
The office will be built to a Building Research Establishment Environmental Assessment Method ‘excellent’ specification and is due to be completed in May 2019.
Babcock has agreed a 15-year, full-repairing lease at a commencing rent of around £1.6m per year, subject to five-yearly rent reviews linked to RPI, collared and capped at 2% and 4% per annum.
Kris McPhail, assistant fund manager at Aviva Investors, said:
“Abstract has a long track record of delivering high-quality office accommodation for corporates.
“This transaction provides our institutional clients with an inflation-linked cash flow from a strong tenant and a property that is well located and strategically important to the tenant.
“These are exactly the type of investments we are actively targeting for the Lime Property Fund.”
The Lime Property Fund targets property investments let to strong tenants on leases with inflation-linked or fixed-rental uplifts and lease terms of 15 years plus.
Mark Glatman, chief executive of the Abstract Group, added: “This building in Bristol represents the third office building Abstract has undertaken for Babcock over the last three years and the efficiencies of procurement and consistency of design have enabled Babcock to benefit from an extremely low rent level for this new building.
“The process of forward funding was only initiated at the beginning of August and Aviva concluded their commitment within a month of agreeing heads of terms.”
Lambert Smith Hampton represented Abstract on the investment sale and DTRE represented Aviva Investors, while Addleshaw Goddard advised Aviva and Pinsent Masons acted for Abstract.
