Net operating income from properties covered by this contract was US$16 million in the year ending September 1997 some of the properties were not income producing until the current year and some, including Colonnade III, will not produce income until completed. Contracts have now been signed for the sale of all of MEPC's Properties in the United States with the exception of two parcels of land in Florida, acquired through the PSIT acquisition in October 1997, amounting to just over one per cent of the total.
James Tuckey, Chief Executive of MEPC plc, said Following last Tuesday's announcement of our contract with General Growth Inc covering the sale of our US retail shopping centres, we are again delighted to have achieved a very satisfactory price for the balance of our US portfolio The US disposal program has been a very large and complex exercise with US$1,315 million of assets now under contract at an expected surplus over MEPC book value of well over US$100million before costs and taxes. This has been achieved in only just over six months since the decision was taken to sell our overseas businesses. The way is now clear for us to implement our planned return of capital to shareholders and to focus fully on our UK business.
Cambridge was facing an over-supply of offices but such has been the demand for space from IT Biotech and Research & Development companies in the first three months of 1998 that the reverse could be true according to international property consultant FPDsavills Research's inaugural East Anglia property survey Office take-up for 1997 in the city peaked at just under 150,000 sq ft in 1997 while demand for space so far. this year sits in the region of 500,000 sq ft Immediate office space availability currently totals just over 400,000 sq ft including City House but excluding the business parks in the development pipeline on its outskirts. Solicitors or conveyancers helping in conveyancing process and doing settlement inspections.Jon Hutt, a director at FPDSavills Cambridge office, said Demand for pure office and R&D space has grown significantly as Cambridge has built on its established reputation as the Hi Tech capital of the UK in association with Cambridge University.
Microsoft's 16,000 sq ft deal in Cambridge (a foretaste for a planned 50,000 sq ft requirement) highlights the growing popularity of the area with the IT industry and it is thiss combined with other research intensive occupiers, which has been the main driver behind the growth of the business park market round Cambridge In Peterborough, it appears that supply is unable to keep up with demand The fact that only one new office building over 20,000 sq ft was available has stimulated refurbishment of existing space in the town and 1998 may see speculative development says the report.
More than 30% of all office space taken up in East Anglia during 1997 was taken by public sector occupiers while other dominant sectors included the professions (26%) and IT (13%) The highest office rent was recorded in Norwich at £14.46 per sq ft (a special case with £11 per sq ft being a more normal top rent in the city) closely followed by lonica's £14 per sq ft in Cambridge. The strongest rental growth in the region was experienced in Ipswich (12.5%) and Peterborough (10%).