Lazari offloads Baker Street block

Lazari Investments has sold a mixed-use asset on Baker Street, W1, to a private investor for just shy of the £35.2m asking price. The asking price reflected a yield of 5.5% and a capital value of £1,109 per sq ft. Located at 81-85 Baker Street, the 31,705 sq ft seven-storey building comprises a ground-floor retail unit let until 2031, with a break option at the end of 2026. The floors above are grade-A offices single-let to flex operator Spaces until 2035 with no break option. The leases bring in rent of almost £2.1m per year – a reversionary passing average of £68 per sq ft, below the average of £100 per sq ft for new lettings on Baker Street. Studies conducted by Anomaly Architects highlighted the potential for longer-term value enhancements, including the option to create a “glass box” with wraparound terracing on the seventh floor. The deal will strengthen the West End’s investment volumes, which have trumped those of the City this year. Colliers’ Q3 London Offices Snapshot report said £2.9bn has been traded in the West End in the year to date, more than doubling the City’s £1.3bn. Michael Elliott and CBRE advised Lazari on the sale.