Serviced Office Group sells Teddington property and signs new lease at Hanover Square

Serviced Office (LON:SVO) , the AIM-listed property company that specialises in flexible office space, has exchanged contracts to sell its property in Teddington for £3.9m. The transaction is expected to complete by the end of October 2011 and will generate a profit after transaction costs of £0.5m. Proceeds from the sale will be used to reduce the company’s borrowings, which stood at £26.7m at the end of 2010. A year earlier, Serviced Office renegotiated its lending facilities with Royal Bank Of Scotland (LON:RBS), with the current deal expiring at the end of 2012. The Serviced Office Group share price edged up slightly to 3p during the morning.

Separately, Serviced Office has signed a lease for the second floor at its premises at 7 Hanover Square. This follows the success of the company’s first floor of serviced offices at this property, which opened in April 2010 and was 91% occupied by September 2010. The second floor of the Hanover property has been completely re-fitted in three weeks with the first clients moving in last week and will provide up to 115 workstations. The addition of the new floor at Hanover Square brings the number of work stations currently operated by the company to 5,076 at 22 centres.

Michael Kingshott, the chairman of Serviced Office, said: “The sale of our Teddington property follows a successful application for planning permission for conversion into residential accommodation. Receipt of this permission, and subsequent sale of the property, is in line with the company's strategy for this building. The re-fit of the second floor in Hanover Square was undertaken in record time and is testament to the skills we have been developing over the last year. The re-fit has been carried out to a high specification providing high quality fully serviced offices. These two transactions, and breaking the 5,000 work station threshold, represent an excellent step forward for the company. We continue to seek new opportunities to manage properties as serviced offices and re-fit projects to undertake on behalf of landlords or leaseholders.”