Business
ACQUISITION OF TWO PROPERTIES & NEW JV
ACQUISITION OF TWO PROPERTIES & NEW JV.
About this update from Derwent London Plc
[{"type":"text","content":"\n \n \n \n RNS Number : 0771I\n Derwent London PLC\n 10 August 2021\n \n \n \n \n \n \n \n \n \n \n10 August 2021\n \n \n \n Derwent London plc \n \n (\"Derwent London\" / \"the Group\")\n \n \n \n \n \n \n ACQUISITION OF TWO WEST END PROPERTIES AND NEW JV WITH\nLAZARI INVESTMENTS\n \n \n \n \n \n Derwent London is pleased to announce three off-market West End transactions with Lazari Investments.\n \n We have exchanged contracts to acquire two properties in London's Knowledge Quarter1, totalling 182,100 sq ft for £214.6m inclusive of costs. The combined rent is £5.3m p.a., or c.£30 per sq ft, reflecting a net initial yield of 2.5%. The two acquisitions offer considerable opportunities for asset management and longer- term development opportunities.\n \n In addition, we have signed a detailed memorandum of understanding with Lazari Investments to establish a new 50:50 joint venture which is expected to acquire three properties already owned by them in Baker Street W1 totalling 122,200 sq ft. Derwent London's initial consideration for the joint venture will be £64.4m inclusive of costs and our share of passing rent will initially be £2.6m. The joint venture adds an exciting development opportunity opposite our 19-35 Baker Street project due to start later in 2021.\n \n West End Properties\n \n The largest property being acquired is 250 Euston Road NW1 which totals 165,900 sq ft and sits on a 1.6 acre site2. This freehold office building is let in its entirety to University College London Hospital ('UCLH') on a lease expiring in 2039. The passing rent is £4.7m or just £28 per sq ft, which is subject to 2.5% fixed annual increases compounded every five years. The next uplift is due in April 2024 when there is also a tenant break with breaks every 5 years thereafter. In the longer term, there is an opportunity to create a larger scheme on this potential Life Science site. The total consideration is £189.9m inclusive of costs, and the initial yield is 2.5% reflecting the low passing rent.\n \n The second property acquisition is 171-174 Tottenham Court Road W1 which lies opposite our Network Building. The purchase is a freehold office and retail building totalling 16,200 sq ft and is multi-let, producing an incom...