CLS Holdings (CLI) is selling its 38,909 square metre mixed use office site in Sweden for £48.8m, which represents an 11 per cent premium to the last external valuation in June 2015. The sale will release funds to be redeployed in the UK, Germany and France, where CLS is focusing its attention.
Shares in CLS have been hit recently, reflecting general market malaise, but also because of concerns over its development at Vauxhall Square, where it is committed to spending £600m on developing a 1.5m sq ft mixed use site. The worry is that buyers of expensive residential schemes may elect to hold back or buy elsewhere as properties valued at over £1,000 per sq ft are not selling as easily as they once were.
But values would have to fall significantly to have a serious effect on valuations and CLS, meanwhile, has a portfolio yielding 6 per cent, which is some way above the 3.5 per cent cost of debt.
