Reading: Schroders puts Reading offices on block

Schroders UK Real Estate Fund has brought to market Davidson House in Reading for £60.79 million, shortly after securing what is understood to be the largest office letting in the Berkshire town centre for three years, CoStar News can reveal.

Schroders is understood to have appointed Gerald Eve to sell the 121,000 sq ft building spread over five floors of grade A offices and ground floor retail and restaurant units. The sale price reflects a net initial yield of 6%.

Occupiers include serviced office group Regus, Network Rail, Santander and Carluccio’s at a passing rent of £3.9m, with around 11,000 sq ft of offices unlet.

Davidson House has recently been upgraded, with improvements including a new reception area. The property fronts onto Forbury Square, one of Reading's key public squares.

Schroders, advised by LSH, has just re-geared Regus’s lease to a 12-year lease on the 59,471 sq ft space it occupies in what LSH said is the biggest office letting in the town in nearly three years. SSE moved to a 186,000 sq ft office at M&G's nearby Forbury Place in 2015.

Tom Fletcher, head of Reading office at LSH, said: “The fundamentals of Davidson House are second to none – Forbury Square is arguably the highest quality urban business environment in Reading with its green spaces, outlook onto Forbury Gardens, and nearby hotel and restaurants.

“The 22,500 sq ft floor plates at Davidson are some of the largest and most flexible in Reading. With its highly contemporary refurbishment, natural light and generous parking, it is no wonder that the building remains so popular. Prime office space in Reading is in short supply due to a successful 2017 and 2018, so this building will be well placed to capture future demand."

Stephen Holloway, Regus, added: “We have enjoyed a very successful 15 years in Davidson and look forward to renewing that relationship in the newly refurbished and rebranded Davidson. Our own refurbishment works shall be starting in the near future and we’re sure that these will be well received by our clients.”

Eve has been appointed to handle the sale but declined to comment.