Successful Exit completed of private equity investment: Operational Real Estate

December 2016

13 months ago, Excellion’s discretionary investment arm purchased a 17,000 Sq Ft 3-storey co-working office building in London, Islington. This investment has now been successfully exited yielding a 55% IRR within just 13 months.

Excellion held controlling majority stakes in both the OpCo and PropCo, providing significant control over both the asset and operations. The transaction structure offered tight downside protection, equity upside and significant control over both the asset and operations. We believe that our initial investment structuring was a key contributor to our successful exit and the pricing achieved.

This attractive return is a result of Excellion’s efficiency in achieving all intended initiatives, including significant refurbishments and obtaining planning permission to extend, in far less time than the intended investment holding period.

Post-acquisition
The intention was always for this investment to deliver equity returns over a 3-5 year term, whilst providing cash flows in the short term. Post-acquisition, value creation was achieved, in multiple different ways, including refurbishment, creation of a mezzanine floor,  increased rentals on refurbished areas, successful planning application, in addition to attractive Purchase Price and Structures.

The Exit
Implementing the above initiatives was achieved significantly faster than initially expected. Having delivered all planned milestones on this shorter timeline, a decision was taken to exit the investment swiftly, by transferring our existing position across both companies to our minority partner. We were extremely happy with the outcome we delivered for our investors, and if a similar transaction would be of interest to you, either as a buyer or seller, we would be delighted to discuss it further with you.