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Rob West Of Clearbell Capital Reveals Ambitions For Coventry

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Earsldon Park

Rob West, a Clearbell Capital partner, was recently interviewed by Property Week and was asked about the recent acquisition of Earlsdon Park and other investement opportunities in Coventry. Here’s what he had to say:

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Why did Clearbell choose to invest in Coventry?
It was partly location and partly opportunity. Coventry is the UK’s 11th-largest city and it’s growing fast – the universities of Warwick and Coventry have been hugely successful and major companies such as Jaguar Land Rover continue to expand and go from strength to strength. Coventry also has excellent road and rail links to London and other key cities.

Meanwhile, the city centre has suffered a chronic lack of investment since the damage inflicted by the Luftwaffe and 1960s town planners. As a result, there is growing demand and a shortage of decent office space, so we see potential for strong rental performance from the current prime office rental level of £16.50/sq ft.

Why Earlsdon Park?
It was a distressed sale by RBS following the demise of the original developer, so the pricing was at a level to reflect that the job was only half done and to allow the potential for a strong return for completing the site. We also liked the mixed-use nature of the scheme including offices, retail, hotel, leisure and land.

Have you been happy with the leasing achieved at Earlsdon Park?
We’re delighted to have effectively pre-let 23,000 sq ft to Sitel on a 10-year lease, having committed to speculatively refurbish 27,000 sq ft of offices last year. I think what this shows is that the right product delivered into this market will attract good-quality occupiers.

In this case, transport links were key; Earlsdon Park is located within a 10-minute walk of Coventry mainline train station and has plenty of parking. It is also an attractive building. The refurbishment is now nearing completion and we’re seeing strong levels of interest in the remaining space of around 11,000 sq ft.

Do you anticipate further significant office development in Coventry?

We think there is a lot of potential and the city offers a wide discount to Birmingham central business district (CBD), which is likely to close further over the next few years as additional investment comes on stream. For example, the mixed-use Friargate scheme will provide the city with new grade-A office space and will improve the area next to the train station.

There is also commitment by the universities to improve the city centre with £1bn of investment. In addition, we see opportunities in alternative uses such as residential and leisure in Coventry and we’re currently under offer to acquire another mixed-use scheme in the city.

Which other West Midlands towns and cities stand to benefit?
Birmingham CBD will be the primary beneficiary, with journey times to London cut by one hour and 21 minutes to just 49 minutes. The project will clearly also create a lot of jobs in the region. We may see more businesses look to split operations and house more back-office-type functions in the West Midlands as a result. In these instances, you would expect central Birmingham and Solihull to be high on the list of priorities in terms of location.

However, we think it’s still too early to tell exactly how the project might play out and you can’t ignore the argument that the main beneficiary may actually be London. We are more concerned with the economic prospects of the West Midlands over the next five to 10 years and think these are excellent, irrespective of whether HS2 goes ahead.

Is Clearbell seeking further opportunities to invest in the region?
We’re always on the lookout for investment opportunities and we’ll continue to view the West Midlands as a key region. Birmingham CBD is likely to be our primary focus for office investment over the next 12 to 18 months. We have an ongoing requirement for logistics investments throughout the region.

Indeed, we already own a number of warehouses within striking distance of Birmingham through our Nevado portfolio. This has been a successful series of investments in response to the rise of ecommerce – they have been designed to meet the ‘last-mile’ challenges faced by retailers and distributors. This is an area of opportunity that we are always keen to explore and develop.

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