BMO Real Estate Partners is the preferred bidder to buy Winnersh Triangle, one of the South East’s largest business parks, for around £355m – a 5.7% yield.
The deal for the 85-acre Reading campus will end a sales process that has been in consideration for almost two years.
Vendors Oaktree Capital Management and Patrizia Immobilien originally reviewed options to sell a stake in their £900m business parks portfolio in September 2015 and instructed JLL to find a joint venture partner.
The portfolio comprised Winnersh Triangle, Watchmoor Park in Camberley, Surrey; Chineham Park in Basingstoke, Hampshire; Birchwood Park in Warrington, Cheshire; and Hillington Park in Glasgow, but a sale of individual assets was ultimately considered more viable.
The 1.3m sq ft Winnersh site had been marketed for £375m – a 5.4% yield.
Oaktree and Patrizia bought the business park, then known as IQ Winnersh, from SEGRO in 2013 for £245.1m as the industrial REIT refocused on logistics assets.
The park is one of the key out-of-town locations for the South East and Reading region and comprises offices, R&D premises and logistics space.
It is home to close to 60 businesses as well as a four-star hotel, fitness centre, spa, bar and restaurant as well as 12.3 acres of adjacent land that has scope for development.
The sale of Winnersh is one of a number of major exits Oaktree is looking to make from the UK market, having invested heavily in 2012 and 2013. Last week, EG revealed that the private equity firm was considering a £500m sale of its SACO serviced apartments business.
BMO’s prospective deal is also a boon for the business parks market, which is expected to see around £1bn traded in the next few weeks. Fortress Investment Group is set to complete its £475m purchase of Legal & General and Goodman’s Arlington Business Parks Partnership next week. Harbert Management Corporation and XLB are also nearing a deal to sell Farnborough Business Park, which has been up for sale for £175m since the start of the year.
A source said: “Best-in-class parks are still trading well although many, such as Winnersh, are attractive because they have industrial potential, while others are primed for residential.”
CBRE is advising BMO.
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