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24th May 2004
A Worcestershire businessman has cashed in his pension and invested in an office suite at Neil Grinnall Homes’ mixed-use conversion of the former Kay’s Catalogue Headquarters in Worcester city centre.
Mio Blagojevic, Managing Director of ZMB, which manages and lets a substantial residential property portfolio, has personally purchased the 125 year lease on a 211sqm (2,271sq ft) suite at the Grade II listed building – one of seven commercial office units being sold on long leases at the £23 million scheme. Situated on The Tything, only 200 metres from Worcester Foregate Street train station, Neil Grinnall Homes’ K1 conversion will also incorporate 24 converted New York loft style apartments. Currently, only two office suites remain available for sale, representing a rare opportunity to purchase the long leasehold on a commercial property in central Worcester.
Neil Grinnall, Chairman of the Neil Grinnall Group commented: “The national housing shortage is likely to keep capital growth for residential property well above the rate of inflation for the foreseeable future. However, the increased competition for residential lettings is encouraging astute landlords to diversify their portfolio and invest in commercial property.
“When embarking on our mixed-use development at the former Kay’s headquarters we knew we were breaking new ground not only in terms of multiple building use in Worcester, but also by selling the commercial space on the same lease terms as the residential apartments. Investors such as Mr Blagojevic and professional firms who wanted to own their business premises have already secured five out of seven of the office suites at K1. Our Agents are in negotiation with several interested parties regarding the remaining two units, so we may be 100 per cent sold before next month’s scheduled completion of the building works.”
The remaining two office suites at K1 are situated on the first and lower ground floor and measure 311 sq m (3,347 sq ft) and 423 sq m (4,553 sq ft) respectively. The conversion will provide character rich office accommodation with original windows granting high levels of natural light. The second phase of the Kay’s development is being marketed under the name K2 and also boasts a mix of uses.
K2 will incorporate 16 newly built apartments, nine townhouses and also entails the preservation of the period façade on to The Tything, which will become the front elevation of a predominantly new build office building. K2’s commercial space is being divided into two office suites totalling 597 sqm (6,423 sq ft.), which are due to be launched to the market this Summer with completion expected for the end of 2004.
Mio Blagojevic plans to let his office suite on a 15 year lease and is expecting to secure a rental yield of 8.5 per cent – nearly double the return many of his company’s larger apartments deliver. The additional units have been purchased by Independent Financial Advisor Morley & Co, Morton Fisher Solicitors and a further two have been purchased by a manufacturing company which plans to use one as its regional headquarters whilst renting out the second unit on a short to medium term lease to supplement their company pension.
Mio Blagojevic comments: “I know I am not on my own by being wholly dissatisfied by the performance of my pension plan in recent years. I don’t expect to retire for a long while, but I knew I had to act fast to transfer my pension savings into another form of investment before it eroded any further. Owning over 30 luxury apartments and houses in Worcester through my company ZMB, I couldn’t resist the idea of trying something new with my personal funds. However, having unsuccessfully dabbled with stocks and shares in the past, I felt I needed a safer investment that offered long-term security.
“There are so few opportunities to buy commercial units in Worcester that K1 immediately shone out as an unmissable investment. The office suite I have purchased has an exceptionally high ceiling and original windows fronting onto The Tything, so I expect to be able to command premium rents just because of the quality of the space. In addition, the location, close to Forgate Street Station and the fact it offers four allocated parking spaces will certainly help to attract a quality tenant on a favourable long lease.”
The internal space for all the office suites at K1 have been converted and refurbished by the Grinnall Group to one of the highest quality specifications available within Worcester city centre. Air conditioning, Category II lighting, suspended ceilings, perimeter trunking and on-site car parking are amongst the benefits to be enjoyed by the new occupiers.
Further information and viewings for the office space can be obtained through Sole Agents Humberts by contacting: Richard Tomlinson on 01905 720 104
Press release drafted by:
Charlotte Crossley
Core Marketing
0121 643 8151
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