The West End of London Property Unit Trust ("WELPUT"), managed by Schroders and advised by Grafton Advisors, has completed on the purchase of the freehold interest in 143-157 Farringdon Road, EC1. The price of £25.85 million reflects a net initial yield of 6.20% and a capital value of £418 per sq ft.
The property is located just 400 metres to the north of Farringdon Station, a flagship station for Crossrail, and comprises an entire island site of four self-contained Victorian buildings totalling 61,918 sq ft. It is multi-let on 28 tenancies with a variety of lease expiries over the next few years. The current passing rent is £1.7 million pa reflecting a low average rent of £27.28 per sq ft with the opportunity to increase the rents as the building is modernised over time.
Jane Gravestock, Head of Specialist Property Funds, UK, at Schroders, said:
"The transaction is in line with WELPUT's strategy to recycle capital into the market following the sale of Stratton House in Mayfair in April for £166 million, having concluded its successful redevelopment. This acquisition provides WELPUT with a strong income yield and compliments its purchase of the core Mayfair St James asset completed earlier this month at Buchanan House in St James's Square, which was acquired for £66.375 million at a 4.5% initial yield or £1,228 per sq ft."
Nigel Kempner, Head of Grafton Advisors, part of Quintain Estates and Development PLC, said:
"WELPUT has chosen to invest in the Clerkenwell area because it is a location that has been increasingly favoured by technology, media and telecommunications related occupiers who have moved from the core West End. It is also a location which we believe will benefit significantly from the new Crossrail station at Farringdon and other development which is coming on stream around it. The buildings themselves offer great opportunity for a rolling refurbishment programme around existing and new occupiers.
"This purchase is in line with our strategy of crystallising profits, in this case through the sale of Stratton House and recycling the capital into assets where we can add value through our expertise."