by Denis Hall
Stanhope-Kajima have exchanged contracts with Norwich Union and ICI for the purchase of the headleasehold on the 300,000 sq ft of offices at Euston Square, NW1, for about £115m.
Designed by Seifert, the development was built by the site’s freeholders, British Rail Property Board, at the end of the 1970s.
Euston Square currently produces £7m pa and is occupied by British Telecom, Grant Thornton, and Inmarsat on standard institutional leases with five-year rent reviews. The next round of reviews are due in the early 1990s. Stanhope-Kajima hold a 125-year lease.
However, Stanhope do not intend to embark immediately on a redevelopment of the site as a second Broadgate — on which Stanhope worked in partnership with Rosehaugh Developments.
Instead, “Stanhope-Kajima have bought Euston Square as an existing investment,” claims David Camp, a development director at Stanhope. “Clearly these are new buildings of some quality and we feel there is more potential at present in simply maintaining the investment to a good standard.”
Nevertheless, long-term redevelopment is acknowledged as a possible option. “We have not as yet investigated this possibility,” said Mr Camp, “but several years hence we may well feel the time is right to redevelop the site.”
Stanhope-Kajima are also refusing to comment on Bloomsbury Health Authority’s proposals to build a new 900-bed hospital on a 10-acre elevated site directly over Euston Station — next to Euston Square.
“Obviously we are aware that talks are going on between BRPB and the authority,” said Mr Camp. “But we do not intend to get involved.”
The authority intends to merge the Middlesex Hospital in Goodge Street, W1, and the University College Hospital in Gower Street, WC1, and house them in the new premises.
Wright Oliphant and Debenham Tewson & Chinnocks advised the vendors in negotiations on Euston Square, while Chesterton represented Stanhope-Kajima. The deal is due for completion at the end of this month.
