The CBXII office and retail complex in Milton Keynes has just changed hands in a deal worth £35 million ($44.7 million).The previous owner, UK private equity real estate fund controller Benson Elliot, has sold it on to Blackrock with an initial net yield of 7%, following refurbishment work they have carried out since buying the property in 2010.
The complex at CBXII is part of the popular Central Business Exchange complex and is strategically located in the Central Milton Keynes Business District. Sitting on the Midsummer Boulevard, it is next to the Central Milton Keynes Shopping Centre and The Hub. Its central location also means that it is right next to a number of top hotels and restaurants. The CBXII is split over 3 buildings and 2 wings.
Benson Elliot acquired the property back in 2010 and set out to improve it in a number of ways; upgraded office space, a better mix of tenants and higher retail levels. The firm has gathered more than £1billion ($1.2 billion) in office and retail property investments across the regions of the UK since then, as it follows a strategy known as “Reach for the Regions”.
Office Space Now 80% Let
The refurbishment carried out in the complex cost £4.2 million ($5.3 million) and accounted for the office space in CBXII being fully modernized across the complex. The work carried out there also created brand new retail space and improved the reception zone as well as the common areas. The demand in Milton Keynes for high quality office rentals means that it is now 80% let.
Marc Mogull is a Managing Partner at Benson Elliot and he commented that the difference between yields in London and the rest of the country was “getting too wide to be justified by fundamentals”. He also pointed out that it is easy to forget that not a lot of new building stock has been delivered outside of the UK capital in recent times.
James Jakeman is a Principal at Benson Elliot. He confirmed that the complex was the firm’s first UK investment and that it has been a “great success for our investors”. He stated that the performance and return on the property have “validated our thesis “of looking for a return on high quality rental accommodation in the UK’s regions. He said that the time is now right to “release the value created” by the work they have carried out at CBXII.