Shares in property development and investment group Terrace Hill Group (LON:THG) edged up by 1.5% to 17.25p in early trading today in news that it had sold part of its Christchurch Business Park to Kondor Ltd. As part of the £5m deal Terrace Hill has entered into a development agreement to construct a warehouse building on the site for occupation by the new owner.

Kondor, a mobile phone accessory distributor, has acquired a 2.15 acre site at Christchurch Business Park, which Terrace Hill will develop into a 59,740 sq ft warehouse building, including 12,740 sq ft of offices over three floors. It is the largest warehouse deal in Dorset for 15 years. Situated to the east of Bournemouth, the nine acre site was acquired by Terrace Hill from BAE in 2008. The company also has planning permission for a further 48,550 sq ft of B1, B2 and B8 accommodation at Christchurch Business Park and is in discussions with a number of other potential occupiers.

Philip Leech, the chief executive of Terrace Hill, said: “The land sale ahead of the construction of a warehouse at Christchurch Business Park is a major deal and marks an important stage in the development of the site. Additionally, it clearly demonstrates our ability to identify and acquire suitable sites and to create attractive developments for potential tenants or owner occupiers. This type of deal allows us to create value through all phases of the development process without the risks associated with speculative development.”

In the six months to April 30, 2010, Terrace Hill reported a 2.9% rise in its adjusted diluted net asset value per share (EPRA) to 45.9p with pre-tax profits of £0.7m against a loss of £26.2m for the year ended October 31, 2009.

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