Derwent London and LaSalle Investment Management have agreed more than £100m of property swaps in the capital as well as a new Whitechapel joint venture.
In the heart of London’s tech belt, the REIT has exchanged contracts to buy the 175-year long leasehold of 170,600 sq ft 20 Farringdon Road, EC1. LaSalle will retain the virtual freehold of the six-storey office-led building (pictured).
There are substantial development opportunities at the site in the medium term. Current rental income is £3.6m pa, with lease expiries between this year and 2022.
In return, Derwent has sold 22 Kingsway, WC2, for £64.5m and Mark Square House, EC2, for £32.1m to LaSalle, reflecting respective yields of 4.4% on both assets.
The sale also includes a 50% interest in a joint venture at 9 and 16 Prescot Street, E1, where there are office refurbishment opportunities. These two properties have been valued at £37.4m, which represents an initial yield of 4.9% to the purchaser.
John Burns, chief executive of Derwent London, said: “We are pleased to have secured a major potential project adjacent to the site of Farringdon Crossrail station in the heart of Clerkenwell, an area where we already have substantial interests. In return we have sold two smaller properties.”
Julian Agnew, chief investment officer at LaSalle, added: “We have agreed a deal with Derwent London that has enabled us to retain an interest in one of Clerkenwell’s premier development opportunities, while diversifying our London exposure.”
CBRE represented Derwent London; Colliers International and Cortex Partners advised LaSalle.
