Workspace has signed an option agreement with Arup for the right to buy the freehold at 13-17 Fitzroy Street, W1, for £98.5m – a net initial yield of 4.6%.
The building has 92,700 sq ft of net lettable space, which is occupied and let to Arup until 2022 at an annual rent of £53 per sq ft, rising to £65 in March 2021.
Arup expects to make an early exit from the building in September 2020.
Workspace said it will reposition the building as a multi-let business centre with the aim of capturing “significant” rental uplifts.
Jamie Hopkins, chief executive of Workspace, said: “This is a really exciting purchase for Workspace, giving us a presence in an attractive location with a building ideally suited to our operational model.
“The transaction emphasises our commitment to expand further through targeted acquisitions, adding to our existing pipeline of refurbishment and redevelopment projects, to deliver superior value and returns to shareholders over the long-term.”
Strutt & Parker acted for Arup.
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