Legal & General Property (LGP), on behalf of its annuity fund, announces that it has purchased and forward funded the development of a 335,000 sq ft Headquarters office for Aker Solutions in Aberdeen for a total consideration of over £127 million, equating to a 5.75% net initial yield.
Representing the largest single office deal ever to take place in Aberdeen, the property forms the first phase of Aberdeen International Business Park which is being developed by the Abstract Group on behalf of Norwegian Investment Company, Aker ASA.
With works nearly complete, the first phase comprises three interlinked buildings totalling 336,369 sq ft (net) of Grade A office accommodation, alongside 1,197 car parking spaces. Taking the property on a 20-year, lease term, with options to extend the leases over three further five year periods, Aker is due to take occupation of the asset in February 2015. Paying an annual rent of just under £7.74 million, with a headline rent equating to £23.75 per sq ft and RPI linked rent reviews, the letting to Aker is believed to be the largest ever single office letting to take place in Scotland.
With consent for total of around 1 million sq ft of accommodation, further phases are expected to include a series of office buildings and at least one hotel. The property is located immediately opposite the entrance to Aberdeen Airport on Dyce Drive, approximately six miles to the north west of Aberdeen City Centre. The strategic importance of the Dyce Airport location is further highlighted by the start of works to the long awaited Aberdeen Western Periphery Route (AWPR) and the associated Link Road between the AWPR and the Airport.
Aker Solutions is one of the largest employers in Aberdeen, with operations spread across a number of sites in the City. When fully occupied, there will be around 2,400 employees in this new complex. With a tight supply of skilled employees in the Aberdeen market, the first phase of the development is focused around providing a full-offer environment for employees, to include a good range of catering facilities, as well as a gym and sports hall, two squash courts, a medical centre, retail and a nursery / crèche. Also recognising the growth of internet shopping, the building offers dried, chilled and freezer rooms for delivery of groceries to the workplace.
Designed to achieve a BREEAM Excellent rating and targeting an EPC Rating of B, the property comprises a number of high sustainability credentials.
Commenting on the sale, Mark Glatman, Chief Executive of the Abstract Group, said: “This purchase by Legal & General is a huge endorsement of the Aberdeen market and this development in particular. When completed, this building will offer the best quality and most environmentally friendly accommodation in Aberdeen.”
Adam Kerr, Head of long income transactions at Legal & General Property, commented: “Abstract has a reputation for delivering buildings of high specification, with excellent green credentials, to an exceptional standard of finish and this development project goes above and beyond this. Investing for the long term, in order to provide a secure, long term income to match our annuity liabilities, the quality and enduring appeal of this building as a key business location is vital, as is the strength of the covenant backing it.”
Laura Mason, Director of Direct Investments at Legal & General Capital, said: “This investment demonstrates our continued commitment to move into direct investments in the UK using our internal capital sources to provide long term financing to many different sectors.”
For further information, please contact:
Olivia Goodall
PR Manager, Legal & General Property 020 3124 2777
Mark Glatman
Abstract Group of Companies +44 (0) 207 747 8272 www.aibp.co.uk