GLS Estates, the sister company of Mark Swetman’s LS Estates, is close to completing its first deal, a £76m Midtown office acquisition on behalf of Singaporean investors Lee Kim Tah Group and Metro Holdings.
The joint venture has exchanged on a deal to buy the freehold of 5 Chancery Lane, WC2, from Lavariano Asset Holdings and Lime Leaf Asset Holdings.
The property comprises 84,836 sq ft of office and ancillary accommodation which is fully let to law firm Lewis Silkin on a lease expiring in March 2023. The current passing rent is £3.8m pa which reflects £44.20 per sq ft overall. The lease is subject to a fixed uplift on 25 March 2018 to £4m pa (£47.15 per sq ft overall). The price agreed represents a net initial yield of circa 5%.
GLS was established last year to deploy Asian capital into the central London market, specialising in core-plus value-add opportunities. The company was an underbidder on multiple office buildings last year including 100 New Oxford Street, WC1, but 5 Chancery Lane will be its first acquisition.
Mark Swetman, joint managing director of GLS Estates said: “Five Chancery Lane represents a fantastic opportunity to invest in a core-plus asset with future reversion. We see the Midtown submarket as being one of the most dynamic London markets which will benefit not only from the Elisabeth Line opening in 2019, but also a finely balanced occupational market.”
Justine Wingrove, joint managing director of GLS Estates, said: “Singaporean Investors have a long-term affinity for investing into the London market and now is a particularly attractive time for investment. The devaluation in sterling and historically low debt costs as well as the strong occupational demand in the office sector have improved investor sentiment and increased demand.”
Savills advised the vendor.
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