BE Offices completes £65m refinancing and lays foundation for major expansion
BE Offices announces the completion of a £65m refinancing of its property portfolio with HSBC.
Simon Rusk, Finance Director, commented: “In the current market this is a significant achievement and we are very pleased to have the backing and support of an institution of the calibre of HSBC.”
Over the past two years, as part of its plan to rebalance its portfolio and prepare for future expansion, BE has repaid almost £50m of debt, reducing its total balance sheet gearing to an historic low of below 50%.
The refinancing, recent sale and leasebacks plus successful trading has enabled the Company to accrue significant cash liquidity available for the acquisition of a further five new London centres in addition to the four centres acquired last year.
David Saul, Managing Director said: “Thanks to a successful £65m refinancing, several sale and leasebacks of centres which raised £70m and profitable trading, the Company is in its strongest financial position in its 24 year history and is able to take advantage of current market conditions to reinvest in its existing portfolio and acquire new centres across London.”
In conjunction with these future expansion plans, BE has bought back the majority of shares held by two retired founders, Colin Gershinson and Bernard Klug. The remaining shares are held by Mr Saul and Mr Rusk, the original co-founders of the business, and BE’s executive directors. This has resulted in a shareholder base focused on the successful medium to long term growth and development of the business.
Mr Rusk, concluded: “The net result of our refinancing and management buy-in is that we have dramatically strengthened BE’s financial position and at the same time provided the Company with the means for major expansion.
Over the last three years we have taken full advantage of a strong property investment market to re-balance our portfolio and cut debt. Equally we have taken the opportunity to grow the business as demand for well run and managed serviced offices has expanded as a wide range of companies, from major corporates to start-ups, see the benefit of taking workspace on short-term and flexible terms. We believe this demand will continue to grow as the flexible space offer becomes an integral part of the broader offices market.”
Currently BE operates a total of 16 centres mainly in central London but including locations such as Milton Keynes, Reading, Basingstoke and Bristol. Over the next two years the company is aiming to add a further five centres to its portfolio, targeting London’s West End/Mayfair and Midtown as it seeks to diversify away from its traditional City heartland.