Oaktree’s £1bn office park exit

Oaktree Capital Management and Patrizia Immobilien are considering the sale of their entire UK business park office portfolio, which could fetch close to £1bn.

The joint venture is looking to individually sell the five assets, which include some of the biggest office parks in the country.

It has appointed JLL to sell the 90-acre Winnersh Triangle park near Reading, Berkshire, and is also exploring the sale of the three assets it acquired from MEPC in 2014 for £430m - Chineham Park in Basingstoke, Hampshire; Birchwood Park in Warrington, Cheshire; and Hillington Park in Glasgow.

The fifth asset in the portfolio, Watchmoor Park in Camberley, Surrey, is also on the block and is valued at around £40m.

Litmus test

The sales will be seen as a litmus test of the strength of investor appetite for assets in the out-of-town business park market and are expected to attract the attention of overseas buyers.

Inspections with potential buyers have been carried out over the past two weeks but no timescale has been put on the sales process.

The JV hopes to achieve a price of £360m for Winnersh Triangle, which was originally marketed last year. It is thought the three other large parks could fetch in excess of £500m in total. If the sales materialise, the JV would pocket a healthy profit across the portfolio that would justify its strategy to snap up the business parks while the market recovered from the recession.

Winnersh Triangle, which it bought for £245.1m in 2013, comprises office, industrial and research and development space across 42 buildings and covers 1.4m sq ft.

The partners have spent around £60m on asset management initiatives, including the acquisition of office building 100 Berkshire Place at the front of the park, the development of 1030 Eskdale Road and the refurbishment of 220 Wharfedale Road. They have also completed a comprehensive upgrade of the public realm.

The park includes 12.6 acres of development land and produces an annual income of £24.4m from its 58 occupiers.

The largest park is Hillington Park, which totals 2m sq ft across 267 acres. Birchwood Park is just under 1.2m sq ft and Chineham Park is 813,000 sq ft.

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