Orchard Street acquires the Velocity development in Weybridge for £56.1 million

Orchard Street Investment Management (‘Orchard Street’), the specialist commercial property investment manager, has completed the acquisition of the Velocity office development in Weybridge for £56.1 million, reflecting a net initial yield of 5.7%. The asset was acquired on behalf of Orchard Street UK Prime Property LP from Rockspring Property Investment Managers LLP (‘Rockspring’) UK Value fund.

Completed in 2013 by Rockspring and Exton Estates, Velocity comprises 106,400 sqft of Grade A office space split across two independent buildings – Velocity One and Velocity Two, totalling 58,393 sqft and 48,007 sqft respectively – spread over five floors.Benefitting from floor to ceiling windows throughout, Velocity has been finished to the highest specifications, achieving an ‘excellent’ rating by the BREEAM environmental assessment method for its sustainable design. Tenants can enjoy the use of a range of amenities, such as generous bike storage and car parking provisions, and top floor roof terraces.

Orchard Street acquired the property 76% let to three tenants, LG Electronics, Cargill PLC and Tomy UK Co Ltd, providing an attractive weighted average lease length to the earlier of break date or lease expiry of just under 12 years. This leaves just 24% (25,000 sqft) remaining and available for immediate occupancy.

Velocity is located in Weybridge, one of the South East’s most sought after office locations, just 24 miles south-west of Central London, and benefits from excellent road and rail links. The asset itself is prominently situated within the historic boundaries of Brooklands, the world’s first motorsport race track, four miles outside of the town centre and only 12 miles from Heathrow airport.

Barney Rowe, Partnerat Orchard Street, commented:

“We are pleased to have secured this highly liquid, prime office asset in an area of the UK that has seen strong occupational demand and is forecast to continue experiencing rental growth over the coming years. Velocity benefits from excellent fundamentals and a key South East position supported by unrivalled transport links. A combination of the current covenant strength on the existing income and the increasing popularity of this area amongst high profile corporate occupiers provide a number of attractive asset management opportunities for our team to pursue.”

Richard Bains,Partner and Fund Manager of the Rockspring UK Value series, added: 

“Velocity was one of the first forward funded speculative office developments in the South East following the global financial crash, and through capitalising on attractive pricing opportunities, Rockspring were able to construct and deliver Grade A office space in an unrivalled location.The strategic sale of this asset has achieved strong returns for our UK Value fund investors.”

Stuart Bedford, Director of Exton Estates said:“We are delighted that our early mover advantage in speculative development with Rockspring has proven successful and created an institutionally desirable asset for Orchard Street. The quality of the buildings and location have successfully attracted high quality tenants and returned good profits once again for our institutional backers.”

Orchard Street was advised by Strutt & Parker. Rockspring was advised by CBRE.