CLS buys three office buildings from Aviva for £59.7m

CLS Holdings has agreed to buy three office properties in Greater London and South East England for £59.7m from Aviva Investors.

The sites in Richmond, Chelmsford and Leatherhead are 94% let and deliver £3.7m rent a year with an initial yield of 5.9%. CLS said there were opportunities to refurbish the buildings for further rental growth.

The FTSE 250 commercial property investor will pay from existing cash holdings and the deal is expected to complete on 28 September.

One Church Road in Richmond is near the train station with fast access to commuter hubs such as Clapham Junction and London Waterloo. The 46,995 sq ft office building is multi-let to four tenants.

Priory Place in Chelmsford is close to the station with a 30-minute train journey to Liverpool Street in London. The 41,036 sq ft building is multi-let to five tenants with much of the building let to HM Courts & Tribunals Service.

Kings Court is a 30,759 sq ft, three-floor building close to the train station with links into Waterloo and London Victoria. It is let to two tenants.

CLS is buying the buildings with the UK's office market in flux because of Covid-19. Many big companies are rethinking their central London property needs with staff increasingly working from home. Some analysts expect companies to set up suburban hubs in commuter towns.

Fredrik Widlund, CLS's chief executive, said: "This transaction further builds our presence in London and the South East, delivering attractive yields as well as opportunities to actively manage the buildings to create additional value. We have remained disciplined in our approach to acquisitions and the strength of these assets, combined with our long-term conviction in the UK market, makes this an exciting addition to our portfolio."