Inside A £439M REIT’s Plan To Pivot Office Assets To Beds And Data Centres
A Singapore-listed REIT that owns £439M of small offices let to the UK government is expanding its investment strategy and will start converting buildings into various types of residential accommodation and data centres.
Alongside first-quarter results, Elite Commercial REIT outlined plans to reposition assets into student accommodation, build-to-rent residential, senior living, social or affordable housing, and data centres, which it said are the real estate sectors with the highest levels of demand compared to supply.
The company owns 155 assets across the UK totalling 3.9M SF, with an average lease length of 4.5 years. The Department for Work and Pensions accounts for 93% of its leasing. The portfolio is 92% occupied.
Elite said many of its assets are in town or city centres, making them good candidates for conversion to living sector buildings.
It has already identified the first assets for conversion. Lindsay House is a 39K SF office in Dundee, Scotland. Elite said it has the potential for conversion to a 200-bed student accommodation scheme, given the city has 2.6 times more students than it does student beds, and the number of students is growing at 4.6% a year.
It said an office site near Blackpool, north-west England, could be converted into a new data centre serving nearby Manchester and Liverpool. The site already has 60 megavolt-amps of power secured, it said.
In London, it has identified four offices with a combined value of £28.5M near Elizabeth Line stations that have the potential to be converted to living assets — Broadway House in Ealing, Oates House in Stratford, High Road in Ilford and Crown House in Romford.
The repositioning of the assets will be managed by Sunway Real Estate Capital, one of the managers of Elite.
“The strategic location of Elite REIT’s assets — highly accessible to key transportation nodes and amenities — is complementary to these asset classes with favourable demand-supply dynamics,” Elite CEO Josh Liaw said in a statement. “Through the broadened investment strategy, Elite REIT would be able to achieve portfolio diversification in terms of income stream, asset classes and tenancy, further enhancing the resilience of the portfolio.”
Bisnow’s Build-to-Rent Annual Conference will look at the scope for converting offices to rented residential and a whole lot more. You can sign up here.
