- February 2, 2014
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The following blog considers CS2’s involvement with secondary assets across the UK…
CS2 has long been involved with advising on the acquisition and redevelopment of secondary assets and the best way to add value to them. It is however a trend that has become increasingly apparent within our client base over the last 12-18 months. More often than not it involves properties that fall under the following categories:
- Properties that do not have a location in a prime city.
- Properties that are in the wrong location within a prime city.
- Income that is not stable due to poor covenants or short lease lengths.
Why is secondary property attractive in current market conditions?
There has always been a price differential between prime and secondary properties but the current yield gap between them is high, creating opportunities for investors who know their markets and can make strategic acquisitions.
What challenges do secondary assets represent?
Secondary assets have often been neglected in terms of maintenance and refurbishment, therefore it is essential to gain sound technically experienced pre-acquisition advice that takes into account all aspects of the building fabric. Furthermore, using surveyors with local market knowledge will help to ensure that you are buying the right properties in locations that offer potential. This is a key benefit of CS2’s national network of offices and locally based professionals.
Recent secondary property commissions
CS2 has recently been involved in the following commissions involving secondary assets:
161 Farringdon Road, London – CS2 provided strategic feasibility advice relating to the condition of the property and refurbishment costs allowing the client to achieve a 360 degree appraisal of the investment opportunity.
Nuffield Centrum, Abingdon – Following a complex negotiation process, CS2 achieved a dilapidations settlement with the previous tenant at £600k. Subsequently, CS2 undertook project management of both landlord ‘Cat A’ and tenant ‘Cat B’ fit out to facilitate a new 10 year leasing.
For further information contact Alan Edge.