Riverside Capital acquires Carey House
for $25m

Riverside Capital's acquisition of Carey House represents a strategic move to bolster its Channel Islands Property Fund portfolio with a high-quality, fully-leased asset. The property, situated in St. Peter Port, Guernsey, is a 26,472 sq. ft. Grade A building leased to Carey Olsen, a prominent offshore law firm, on a long-term lease with 14 years remaining and no break clauses. This acquisition fills a critical gap by adding a stable income stream and enhancing the fund's asset quality in an increasingly competitive market. The deal was financed through a combination of equity issuance and debt: Riverside placed 14 million shares and secured a £3.6 million loan from Royal Bank of Scotland International, resulting in a loan-to-value ratio of 21.5%. This financing structure allows for a conservative approach to leveraging the asset while maintaining liquidity for future opportunities. Competitively, this acquisition strengthens Riverside Capital's position in the Channel Islands real estate market by securing a prime property with a reliable tenant and long-term lease. The fully let nature of Carey House reduces risk and enhances portfolio stability, positioning Riverside to outperform competitors who may lack similar assets under management. This move is likely to attract further institutional investors seeking stable returns in a robust rental market. Post-acquisition, the key risks include potential challenges in maintaining occupancy rates as leases expire and navigating any economic downturns that could impact Carey Olsen's ability to fulfill its lease obligations. However, with the asset's strong tenant profile and long-term lease term, these risks are mitigated. Integration challenges will be minimal given the off-market nature of the transaction, allowing for a smooth transition. Growth vectors post-close include potential rental income growth through upwards-only rent reviews and further diversification of the fund’s portfolio to capitalize on market opportunities.