O Twelve Estates, the listed fund set up to buy property in East London, has completed the sale of a 49,000 sq ft office building for £5.5m.
Solar House was 80% vacant at completion. O Twelve said the sale removes both the need for the company to commit cash to refurbishment costs prior to re-letting and a significant exposure to ongoing void holding costs.
The sale proceeds have been placed on a restricted deposit account and are available for repayment of debt or, with the agreement of the company’s lenders, for potential future property acquisitions.
Since 30 September 2010, the company has also realised £650,000 on the disposal of a further vacant office unit at Redwing Court, Romford and has completed nine new leases with an aggregate annual rent, payable on completion of rent-free periods, of £221,000.
Following completion of a placing and open offer and receipt of £35m net cash in January, and the sale of Solar House, the company’s’s net debt as at 28 February 2011 was £105m, compared to £142m at 30 September 2010, comprising £125m loan principal less restricted cash of £12m and unrestricted cash of £8m.
Phil Rhodes, Chairman of O Twelve commented:
“The sale of Solar House both removes a substantial potential cost exposure and adds to the company’s now significant cash resources. This provides us with a number of opportunities both to continue to add value to the existing portfolio through active management and to consider new property ventures.”