Pan European investors target South Wales commercial property market

Sale of Matrix Court, Swansea, further evidence of international funds seeking returns from regional investments

14 May 2015

Share this

The sale of Matrix Court in Swansea to American fund Quidnet Capital - acting on behalf of Colony Capital - for £2.35m provides further evidence that the investment returns on commercial property in South Wales are attracting attention from Pan European funds. Graham Davies, Investment Director at Cooke & Arkwright, acted on behalf of a Private Trust client in the deal.

The 28,182 sq ft building, which was developed in the early 2000s by the Trust, is let to the Welsh Government and JCP Solicitors, providing an income of £282,000 per annum. Quidnet Capital had previously acquired the adjoining building on behalf of Colony Capital, let to Trilium, as part of the £97m Silverbird Portfolio in 2013. Mr Davies said it was therefore good estate management for them to acquire Matrix Court, which shows an 11.35% yield.

“This is another example of international funds seeking attractive returns in the region,” he said. “The deal follows close on the heels of another investor, Maya Capital, acquiring Building 1V Telelink at Sandringham Park which is let to DVLA, at £6.3m, showing a plus 10% yield. It is interesting to see the attention that South Wales is attracting from overseas. Clearly the returns are seen as higher than average and are valuable additions to Pan European investors.”

Mr Davies added that while seen in isolation, the properties were high up the risk curve. “But when balanced with other assets and across wide geographic areas, the risk factor is somewhat diluted within the wider fund/s. As funds seek margins on yield it is no surprise therefore to see the likes of Clearbell, Maya, Quidnet/Colony, Karling and W P Carey acquiring significant assets in the region,” he said.

In comparison, he said that interest from regional investors was limited, perhaps because they do not have a wider spread of risk within their portfolios.

Cooke & Arkwright have provided independent property consultancy services to the College for a number of years. This advice has included property valuations and negotiation around property acquisition and disposal, rent reviews and the preparation and negotiation of the College’s farm business tenancy agreement. The College has consistently received an excellent and professional service from Cooke & Arkwright and their valuable support to the College is recognised and appreciated.

Bob Bates, Director, Coleg Gwent