Mayfair Capital’s charities fund has forward-purchased a Watford office development prelet to WPP subsidiary Salmon – a global digital commerce consultancy.
The new 28,000 sq ft office development has been acquired by The Property Income Trust for Charities (PITCH).
The specialist fund ‐ which is managed by Mayfair Capital Investment Management and allows UK charities to invest in commercial property in a tax‐efficient manner ‐ has exchanged contracts to acquire the Clarendon Works project at 36 Clarendon Road for £14.5m on a forward commitment basis, reflecting a net initial yield of 5.84%.
Due for completion next year, the scheme has been developed by Boultbee Brooks Real Estate and is the first new‐build office project in Watford for more than 15 years.
Availability of Grade A office space in the town has been steadily declining and now stands at close to zero.
Salmon has taken a 15‐year lease, with a tenant break option in year 10, at a rent that equates to £31.50 per sq ft.
PITCH fund manager Simon Martindale said: “The purchase reflects Mayfair Capital’s thematic investment strategy of acquiring high-quality office buildings in urban areas that are supported by good local amenities and transport links.
“Watford is strategically located inside the M25 and has excellent rail links into central London, with a journey time of just under 15 minutes to Euston. The intu Watford shopping centre is currently undergoing a £110m redevelopment programme which will provide further restaurants, retail and leisure amenities.
“Watford office rents remain at a considerable discount to central London, as well as comparable office locations such as Uxbridge and Staines, where prime rents are now up to £36 per sq ft.
“Accordingly, we see Watford becoming an increasingly attractive office location for occupiers and expect to see good rental growth off the current level of income.”
Hanover Green acted for PITCH. Aurum Real Estate advised BBRE.
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