CLS upbeat after govt portfolio lease renewals

By Paul Norman - Wednesday, October 04, 2017 8:00

CLS Holdings has completed lease renewals with the Secretary of State for Communities and Local Government on 14 properties across the UK for which the SSCLG had leases which were due to expire, or had a break clause effective, on 31 March 2018. The properties are predominantly used as Job Centres by the Department for Work and Pensions.

New ten year leases have been granted on 13 properties which, with 11 having breaks in 2023 or 2026, provide a weighted average unexpired lease term to first break of 6.8 years.

One property’s lease has been extended on a short-term basis. The annual rent from the properties will be £5.5m (previously: £6.5m), with the majority index-linked to the Consumer Price Index. None of the leases has a rent-free period or other inducement.

Fredrik Widlund, Chief Executive Officer of CLS, said: “In 2013, when CLS bought its portfolio of Government-let properties yielding 12%, it was confident that the vast majority of the leases with events in 2018 would successfully renew. I am delighted that our in-house asset management team has secured such a positive outcome which addresses the uncertainty which these lease events had caused, and which is likely to result in a commensurate increase in the values of the relevant properties at 31 December 2017.”

pnorman@costar.co.uk

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