We’re delighted to announce that we have exchanged contracts this week to acquire a landmark, mixed-use, building in Bristol in a second deal with our partners Development Securities plc.

Colston Tower is a building well known to anyone who as studied or worked in the city, because it’s:

a)Very big (90,000 sq ft over 15 stories)

b)Bloody ugly/a masterpiece of brutalist architecture (delete as appropriate)

c)Right in the middle of the city

d)Next to a lot of bus stops

d)Has a couple of legendary restaurants on the ground floor

Despite the recession and the dearth of the secondary office space available in the City centre, it is 80% let, off rentals that give good scope for rental growth over the medium term as a result of some targeted CapEx.

We have paid LaSalle Investment Management a NIY of >10% which gives us a great cash on cash return, after some modest gearing, and some expectation of a little capital appreciation.

30% of the income is from retail/leisure, which is well within my area of expertise, now all I need to do is work out whether you zone the office space from the windows or the lifts?

Any ideas?

Ellandi/Development Securities were advised by GVA.

We are pleased to report that we have closed the acquisition of a senior loan in partnership with Development Securities. Given there are various confidentiality issues associated to this, I will simply quote the stock exchange announcement that Development Securities made this morning. We will tell you more as and when appropriate.

“Development Securities announces acquisition of property backed senior loan for approximately 
£10.0 million

Development Securities, in conjunction with Ellandi LLP (’Ellandi’), announces the acquisition of a senior loan secured on a neighbourhood shopping centre in South West England. The loan was acquired at a significant discount from a leading UK high street banking group. Development Securities have invested approximately £10.0 million in the transaction and own 100% of the loan at closing. The loan is currently performing and interest payments are being met by the borrower in full. The Company will initially receive a yield in excess of 10% per annum in relation to the investment.

Notwithstanding its performance, the loan is presently subject to a loan to value covenant breach which has precipitated the decision for the UK banking group to dispose of the loan.  The acquisition was financed out of the proceeds of the Company’s recent equity fund raising, completed in July 2009.

Development Securities consider the loan to be well secured and given the discounted purchase price, offers numerous potential management options. Due to confidentiality constraints, the Company is not able to provide further information at this stage but hope to make further announcements in due course.

Ellandi is a specialist investment manager focused on UK commercial property. Ellandi specialises in acquiring property related debt, recapitalising distressed property situations and investing in direct real estate. Subject to the future performance of the investment, Ellandi may receive a carried interest as part of the management arrangements.”