McKay Securities Plc, the only UK REIT specialising entirely in the South East and London office, industrial and logistics markets, has exchanged contracts to sell the freehold interest of Great Brighams Mead, a prominent office building located in Reading’s town centre, to residential property developer King’s Oak for £19 million. Completion of the sale is conditional on delivering vacant possession and is anticipated in April 2022.
The 84,840 sq ft three-storey building sits on a 2.6 acre site in a prime central location in Reading, and benefits from its close proximity to Reading Railway Station and the River Thames. The site was part of a larger holding acquired by McKay in 1973 for £0.91 million. Since then a range of disposals and asset management initiatives have enhanced the value of the site, culminating in the development of Great Brighams Mead.
McKay reviewed a range of options to maximise the asset’s value ahead of lease expiry and was subsequently successful in obtaining planning approval for the conversion of the building to 110 residential apartments, enabling the freehold to be marketed for a range of commercial and residential uses.
Proceeds from the sale will initially be used to reduce borrowings, prior to reinvestment in value add opportunities including acquisitions, development and asset management initiatives.
Simon Perkins, Chief Executive of McKay, said: “This sale is a positive conclusion to the company’s ownership of this site and Great Brighams Mead’s lifecycle as an office. It is a good illustration of our active asset management and our ability to maximise the value of our portfolio for the benefit of shareholders. In this instance, our analysis of a full range of potential uses for the building concluded that a residential sale would optimise value.”