Exit announcement - O2 Academy Birmingham

News: Investment News | 1 January 2015

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We are pleased to announce the sale of the 32,600 sq.ft property tenanted by the O2 Academy in central Birmingham. Having acquired the property in late 2012 for £2.15m, we sold it 27 months later for £3.155m.

  • Investment date: October 2012
  • Exit date: January 2015
  • Acquisition cost: £2.15m
  • Sale value: £3.155m
  • Return to investors: c.60%
  • Property advisers: Riverside Capital

The sale delivers our clients a total return of c.60% in just over two years, and an IRR of c.24% p.a. This far exceeds the targeted return at the time of the investment and delivers an exit three years ahead of schedule. As with all of our investments, clients are able to invest in multiples of £25,000; in this instance each £25,000 invested returned almost £40,000. Our clients invested £1.3m of equity in October 2012 as part of a fully managed syndicate, with a bank debt package provided by Santander.

We acquired the property at an attractive price reflecting a Net Initial Yield of 7.4% with a lease running until 2034 and a full parent company guarantee from FTSE100 Compass Group plc. The O2 Academy is one of the Midlands’ best known live music establishments and comprises three separate venues under one roof with a capacity for 3800 people.

  • a prime asset with a secure, long dated income stream
  • a target annual distribution of 5%
  • opportunities to drive rental growth through active asset management

As with all of our real estate investments we acted in conjunction with Riverside Capital, our long standing property partner who sourced and managed the off-market transaction.

“We are delighted to have been able to deliver such a good return to investors and in a much shorter time frame than was originally expected. Through our relationship with Riverside Capital and the clients within our network we are able to access highly desirable property opportunities.” - Claire Madden, Partner