The property deal-flow in London continues unabated with a number of funds and property companies reporting successful completions. Insight foundation property trust has acquired National Magazine House at 72 Broadwick Street, W1 from Shaftesbury plc for £45m (€66.5m). The price reflects a net initial yield of 5.29%. The property is the London headquarters of The National Magazine Company whose titles include Harpers & Queen, Cosmopolitan and Esquire.
The National Magazine Company has a 15-year lease expiring in September 2018 on this 5,110 m2 office building at an annual rent of £2.27m. This equates to £40 per ft2. The property also comprises 11 flats totalling 118 m2 which produce over £250,000 of rental income per annum. There is a rent review on the office space in 2008 which Insight believes is well timed to benefit from West End rental growth.
Duncan Owen, Insight’s property managing director, said: “We are very pleased to have concluded our third major central London acquisition this year. We are realising our strategic ambition of increasing the trust’s weighting to this area of the market.”
Land Securities have announced a new tenant in Deloitte. The financial services group has agreed to lease another building at Land Securities’ New Street Square development on New Fetter Lane, EC4.
In addition to Building B, which comprises 19,500 sq m of offices over 10 floors, Deloitte has exercised its option over Building C, a further (3,846 m2) of office accommodation. Both buildings will be ready for fit-out in summer 2007.
Mike Hussey, managing director of Land Securities’ London portfolio, said:
“This is further vindication that New Street Square is well suited to the large professional services occupier. The development will breathe new life into this commercial district and we are delighted with Deloitte’s decision.”
New Street Square is replacing an assortment of post-war office blocks with four contemporary office buildings, all of which open on to a landscaped central square lined by shops and cafés. Approximately 382,000 sq ft of offices and 30,000 ft2 of retail remains available for pre-letting within the scheme. CB Richard Ellis and Jones Lang LaSalle are joint leasing agents for the development.
Rockspring, acting on behalf of Hanover property unit trust, has acquired the freehold on 65-68 Leadenhall Street (pictured), EC3 for £12.4m reflecting a net initial yield of 6.39%. The property comprises 2,896m2 of office accommodation and is multi-let to eleven tenants. There are two vacant floors, for which the vendor has provided a year’s rental guarantee. Average rental levels equate to approximately £27 per ft2. Robert Palmer, director of Rockspring property advisers, said: “The acquisition complements the trust’s existing portfolio and is strategically timed to provide exposure to the City of London office market.” Hanover was restructured as a Jersey-based property unit trust in January 2004, since when Rockspring said it had increased the net asset value from £257m to £385m through a combination of new equity and capital appreciation. Hanover has retained a position as the top performing balanced PUT over three years in the HSBC/IPD pooled property fund index.