04/10/2016
Largest single property disposal in group’s history follows acquisition of prominent Southampton site and redevelopment of landmark office building in Weybridge
Established in 1932, RO Group is
a family owned business which has a long heritage of investing in local
economies across the UK. It has achieved
this through a variety of trading and investment businesses, operating across
diverse sectors, as well as by providing substantial support of local community
charitable projects and causes.
Through its wholly owned subsidiary RO Real Estate, which acquires,
manages and develops commercial property assets, RO is delighted to announce
two significant transactions, both of which underline its strategy of adopting
a long term approach to business.
Firstly, RO has acquired a prominent 48,441 sq ft office development on the harbour front
within Town Quay, Southampton, from TH Real Estate for £7.6 million. Existing
tenants include Bank of Scotland, the Secretary of State for Communities and
Local Government and Lambert Smith Hampton. There are two vacant floors
totalling circa 8,725 sq ft which RO is currently refurbishing having agreed a
letting at £170,000 per annum; on completion of this letting the property will
be fully let. The site is a short walk from West Quay and in an area that has
been earmarked for significant redevelopment with numerous retail, commercial
and residential development projects planned.
LSH advised TH Real Estate on the sale of Southampton and CBRE advised
RO.
With a more than 80 year track record RO has always been committed to
identifying and assessing long and medium term opportunities in regions which
are being transformed as part of wider urban planning projects. This
entrepreneurial attitude and investment in property has run through the ethos
of RO Group since it was founded in 1932 by Stanley Graham Rowlandson. His
innovative attitude to business has been carried forward by his son, and
current Chairman, Richard Rowlandson, who used the Group’s property and
retailing experience to develop over 40 neighbourhood centres in the 1980s and
90s and more than 30 Pegasus retirement homes in the 2000s. Now Graham’s
grandson and current Group Managing Director, Edward Rowlandson has grasped the
mantle overseeing the Group’s investment in various entrepreneurial ventures.
The Group has also just achieved the largest single sale of an individual
property asset in its history, being the Staycity Hotel development in Birmingham’s
Jewellery Quarter. The Staycity development, which consists of 170 apartments
within a five minute walk from the City Centre, has been sold to KFIM Long
Income Property Unit Trust (Knight Frank Investors) for almost £21 million.
The land had been in the RO’s ownership since 2008 and despite
significant commercial challenges along the way, including two contractors
going into administration, RO persevered with the project creating an
impressive development right in the centre of Birmingham. Colliers advised RO on the sale
of Staycity and Mulberry Bay advised KFI.
Alongside these two transactions the RO has also recently embarked on a
speculative redevelopment project in Weybridge. Dakota, previously known as
Persimmon House and acquired in late 2013, is a 22,000 sq ft headquarters
office building which is being refurbished and extended to provide 35,500 sq ft
of grade A space. Construction work has begun and should be complete by the end
of March 2017.
Richard Bourne, head of RO
Real Estate, commented: “These
three examples are all reflections of the RO’s approach to property; finding
opportunities to create value in every asset we own whether through
redevelopment, refurbishment or general asset management. In doing so, we aim
to deliver the optimum returns for the company and the highest quality assets
for our occupiers.
“The sale in Birmingham places us in an extremely strong position with
significant cash resources, enabling us to move quickly and take advantage of
new opportunities as they arise. The current portfolio performs very strongly
and we are seeking to build on this by deploying circa £30m of cash in £2-6m
lot sizes across southern England. All acquisitions will need to meet out
strict criteria: low availability and high take up/demand in strong macro and
micro locations. We always look at alternative use options and this can lead us
to also buy some less obvious assets such as petrol filling stations and garden
centres as well as the more mainstream sectors. The portfolio is risk adjusted
with some long income, dry investment assets as well as some value-add opportunities
and this will continue.
“The acquisition in Southampton is evidence of our investment in strong
regional markets. This is a good-quality
and extremely well-located asset which should prove reversionary given the
occupational supply and demand dynamics. It also offers the opportunity to add
value through an active asset management strategy.”
Edward Rowlandson, Group
Managing Director, RO Group said: “Our
experience in Birmingham can perhaps be seen as a microcosm of the recent
economy as a whole with its various ups and downs. The team have worked
extremely hard to overcome the various challenges, finding solutions to
problems and eventually concluding on the sale of this high quality asset. With the additional resources the disposal
has provided we look forward to acquiring new assets which conform to the RO’s
instinctive ‘in business to do business’ approach to property.”
-Ends-
For further information:
Edward Rowlandson / Nick Moore, RO Real Estate
01707 601400 / 0207 025 1780
Kirsty Allan, Tavistock 020 7920 3150
Notes to Editors:
RO Real Estate is a privately-owned company specialising in commercial property investment and development in the south east, with a portfolio of more than £81 million of properties and £35 million of cash. It is the property division of the RO Group, which was founded in 1932 by Stanley Graham Rowlandson. His innovative attitude to business has been carried forward by his son, and current Chairman, Richard Rowlandson, who used the Group’s property and retailing experience to develop over 40 neighbourhood centres in the 1980s and 90s and more than 30 Pegasus retirement homes in the 2000s. Now Graham’s grandson and current Group Managing Director, Edward Rowlandson has grasped the mantle overseeing the Group’s investment in various entrepreneurial ventures which in addition to commercial property investment include residential development, high-quality holiday lodge developments, domiciliary and specialist care services.
