Kames Capital has completed the off-market acquisition of a central Cardiff office building from 101 Asset Management for £6.7m, a net initial yield of 8.5%.
Golate House comprises two connecting buildings with dual frontages on to 98-101 St Mary Street and 31-35 Westgate Street.
Providing 55,645 sq ft across four upper floors of offices and five retail and leisure units at street level, current occupiers include Brewdog, Betfred, Working Links, CPS Group, Sonovate and the National Probation Service.
The building has been acquired for the Kames Property Income Fund, with a view towards improving income through active asset management to capitalise on the opportunities created by the nearby Central Square development. V7 has been retained as asset manager on the scheme.
Matt Leach, partner at V7, said: “Located in the heart of Cardiff, Golate House is well positioned to capitalise on the improvements being seen nearby, notably the Central Square development, as well as benefit from the growing demand for office space in the city.
“Providing high-yielding offices in a core market, Golate House offers significant asset management opportunities in line with Kames’ investment strategy.”
Richard Peacock, co-fund manager of the Kames Property Income Fund, added: “With Grade A rents in Cardiff city centre having risen to £25 per sq ft in the current cycle, we expect to see a similar uptick in rents for good secondary properties.
“Golate House presents the opportunity through a phased refurbishment to create an attractive product in an excellent location targeting value-conscious office occupiers.”
The deal follows Kames’ recent acquisitions of offices in Bristol and Slough, also advised by V7.
Leach said: “This trio of buys highlights Kames’ targeting of assets that are well-positioned to capitalise on the opportunities presented in their respective markets, securing growth through strategic asset management.”
Kames Capital was advised by V7 Asset Management and Savills; EJ Hales and Calan Retail represented 101 Asset Management.
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