Great Portland Estates has exchanged contracts to buy Orchard Court, Portman Square, W1, from Rosanna Holdings Ltd, for £37m.
The deal for the 47,762 sq ft retail and office property reflects a net initial yield of 4.64% and a capital value of £775 per sq ft.
Orchard Court is arranged over basement, ground and the first floor of an island site comprising the entire eastern side of Portman Square in the heart of the West End.
It is let to 14 tenants paying a total rent of £1.8m per annum, or £39 per sq ft.
The weighted average unexpired lease term is five years.
There are five rent reviews and one lease renewal outstanding which, once settled, will increase the yield to approximately 5%.
The property is held on a long lease expiring in 2101 at a fixed rent of £1,000 pa.
Together with the purchase of Minerva House, SE1, announced in December 2012, GPE has now invested more than 70% of the proceeds from the £140.6m share placing undertaken in November 2012.
Toby Courtauld, GPE chief executive, said “We are pleased to have acquired Orchard Court, which will deliver an accretive day one yield, off low passing rents providing us with a significant growth opportunity in an attractive and improving location. The asset also offers potential synergies with our other significant interests in the area.”
Strutt & Parker advised GPE.
jack.sidders@estatesgazette.com
