Derwent London has bought the 100-year leasehold interest in 230 Blackfriars Road, SE1, for £55m.
The 0.8-acre site, which includes 30 car parking spaces, has medium-term potential for a substantial office-led development.
The site currently comprises two properties, the 1970s Conoco House, which earns £2.1m in rent for its 60,000 sq ft of office space, and a 36-unit residential building called Quadrant House. The 3.5% net initial yield for Conoco is expected to to rise to 4.2% after letting 9,400 sq ft of vacant space. All the current leases are set to expre in 2025, with tenant breaks in 2023. Quadrant House is let until 2074 at a nominal rent. The ground rent is a fixed £5,000 pa.
Derwent chief executive Paul Williams said the site was “an exciting addition to our medium-term development pipeline”. He added that the deal “establishes a new village for us in the heart of south London’s innovation corridor and health science cluster in Southwark”.
In a third-quarter business update released this morning, Derwent London said that rent collection had reached 98%, new leases had added £5.5m to the rent roll and net debt had decreased to £944.5m, or 16.6% LTV.
CBRE advised the vendor.
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