Significant October deals
Deal type Investment
Seller Evans Randall
Buyer Private Middle easter investor
Size 34,000 sq ft
Price £80m – sub-4% deal
Joanna Bourke, EG’s West End correspondent, says: Private equity group Evans Randall made a satisfying 33% return on its only West End asset last month, when it sold 34,000 sq ft office building 15 Sackville Street, W1, for £80m – a sub 4% yield. The sale, to a private Middle Eastern investor, came just 18 months after the private equity group bought the property for £60m. The rapid increase in value shows how in-demand Mayfair stock still is. Furthermore, the deal is the latest in a string of Middle Eastern parties buying West End assets, wooed by strong rental income and luxury tenants. Middle Eastern money spent on West End commercial properties more than trebled in the first six months of 2014 to £272m, compared with £88m in the same period in 2013, according to Knight Frank.
Principal Place, EC2
Deal type Lease
Size 430,000 sq ft
Lessor Brookfield
Lessee Amazon
Rents Asking rents were £52.50
Jack Sidders, EG’s news editor, says: Amazon’s 430,000 sq ft prelet at Brookfield’s Principal Place, EC2, was the stand-out City deal of September. A little over two years on from spending £518m on a portfolio of offices and development opportunities from Hammerson, north American developer Brookfield has now secured two major prelets (Schroders signed for 310,000 sq ft at London Wall Place EC2 in January, though technically the site was acquired separately to the rest of the portfolio) and has sold 125 Old Broad Street, EC2, and a stake in the residential element of Principal Place, both at significant premiums. The fact Amazon has agreed a short-term deal at Leadenhall Court, EC3, while Principal Place is built is the icing on the cake.
People, politics and peculiarities
Agencies do the staff shuffle
The agency merry-go-round shows no sign of slowing down with developer British Land stepping in and poaching staff from DTZ and JLL to bolster its central London offices team. JLL has not been standing still though – it has been on a recruitment drive and has four staff joining its central London agency team this month.
Hanmer time
Not a move but a promotion, Dan Hanmer will head CBRE’s Midtown and South Bank team taking up residence in the firms Covent Garden office, while Colliers International’s David Hume has left to set up his own tenant representation business in the West End
Boris sets out his stall
London Mayor and Conservative candidate for Uxbridge Ruislip Boris Johnson has already started the election guns firing, pointing out that more affordable houses have been built in London during the recession than were built under Labour during the boom period.
What’s in a name?
Remember the furore over the Heron/Salesforce Tower renaming? Well the City of London Corporation has issued new guidelines which mean a tenant will have to occupy more than 50% of the space in order to rename the building. So has that solved the problem at Heron/Salesforce? Not really, it’s just added another name to the tower. Salesforce can call the building… Salesforce, and other tenants can use 110 Bishopsgate. Our money is still on Heron being the name of choice for City workers and taxi drivers.
Look east in Battersea
And while we are on the subject of naming, does anyone else get suspicious about a location when “east” or “west” is tagged on to a name synonymous with being quite nice or even a bit posh? We’ll let you decide about Battersea Park East, the name of Taylor Wimpey’s new scheme in the Battersea Nine Elms Opportunity area.
Those with money invested in West End offices are laughing all the way to the bank, as returns rocketed 23.3% in the 12 months to June 2014 according to IPD/Colliers International.
New sheds could be going up near Heathrow in West London as Prologis has bought 30 acres from Stockley Park and plans to submit an application for light industrial use to Hillingdon council next year.
Workspace is rubbing its hands after it sold a portfolio of sheds within greater London for 25% above the asking price reflecting a net initial yield of 5.3%.
Take-up figures for Central London could be higher than the last peak in 2007, predicts Cushman & Wakefield, which estimates that 4m sq ft of office space is under offer.
Skyrocketing retail rents have prompted a European fund to buy a West End block at a price reflecting an eye-watering yield of 1.5%
CLS has been granted permission to redevelop Westminster Tower on Albert Embankment for a predominantly residential scheme.
Rising housing prices are causing concern for London businesses who fear it may make recruitment difficult.
The EG London team gauges the trials and tribulations of the capital’s property market
