Life Science REIT has paid £85m for an Art Deco office block in the heart of London’s Knowledge Quarter.
The REIT has completed the deal to buy 7-11 Herbrand Street, WC1, from LabTech, with the cash price reflecting a net initial yield of 4.42%. The entire building is currently let to Thought Machine, one of the UK’s leading fintech companies, until October 2026.
Robert Akkermann, CIO of LabTech, said: “We acquired this iconic building in March 2016 for £56m and transformed it into a new state-of-the-art office for a leading UK fintech. Now we believe that it is the optimal time to take advantage of the lack of supply of similar assets within Central London.”
The property currently comprises 67,000 sq ft of grade-A office space, but Life Science said it “represents an ideal opportunity for development as a major life science asset”.
The REIT has undertaken a feasibility study to determine the suitability for lab conversion.
The study confirmed that the building, its sixth purchase, has great potential and benefits from large floor to ceiling heights, structural slab and large, column-free floor plates.
Simon Farnsworth, managing director of Ironstone Asset Management, the REIT’s investment adviser, said: “The important location and prominent size of the asset, along with attractive physical characteristics such as a large floor to ceiling height, represent outstanding potential for conversion into a leading long-term life science property.”
The property lies close to a number of major academic institutions, healthcare organisations and innovative companies including University College London, University College Hospital, the Francis Crick Institute and Oriel – the project that will replace Moorfields Eye Hospital, which is due to open in 2026.
Life Science REIT has now deployed more than £262m of total capital since its IPO in November, representing 75% of the net proceeds raised.
Savills and CBRE acted on behalf of the vendor, LabTech.
International investor and developer LabTech owns around 20 acres of real estate in central London, including Camden Market and the recently opened Hawley Wharf mixed-use development in Camden.
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