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Picton offloads Angel Gate for £29.6m

Picton has agreed to sell its second largest office asset, Angel Gate, EC1, for £29.6m.

The 64,765 sq ft office campus has been bought by QSquare (Brighton) at a price which is 5% above its 31 December 2023 valuation.

Picton said the sale was in line with the company’s strategy to repurpose appropriate office assets and that it followed the firm’s securing of residential planning consents during 2023.

Following completion of the deal, Picton’s office exposure will reduce from 30% to 28% and portfolio occupancy will increase from 90% to 91%.

Picton said it intends to use part of the proceeds to repay its revolving credit facility of £16.4m, currently costing 6.8% per annum. Following this repayment, the company’s proforma LTV will reduce from 28% to 25% and the weighted average interest rate will reduce from 3.9% to 3.7%.

The average maturity of the debt will also increase to eight years, with 100% of the drawn debt fixed.

The sale price is 5% ahead of the 31 December 2023 valuation of £28.1m.

Angel Gate is around 50% occupied and represents the company’s largest single void, with an annual net rental income of £700,000.

Picton said it would “consider options” for the remaining proceeds of £13.2m following completion of the disposal, “dependent upon prevailing market conditions and investment opportunities”.

Chief executive Michael Morris said: “This sale marks the culmination of a complex process to maximise value from a partially vacant office asset by securing residential planning in a Zone 1 London location. The transaction reduces our office exposure and the sale price supports its December 2023 valuation.”

The firm put Angel Gate up for sale through CBRE in January as an office-to-residential conversion opportunity. Gerald Eve advised Qsquare on the acquisition.

Picton has also this morning welcomed a new chief financial officer to the company. Saira Johnston joined the board from Gravis Capital Management. Her previous roles were at Moorfield Group, CBRE Global Investors/ING Real Estate and Morgan Stanley Real Estate Funds.

She replaces Andrew Dewhirst, who is retiring from the company.

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