Business
Major West End Acquisition of
Major West End Acquisition of.
About this update from Derwent London Plc
[{"type":"text","content":"\n RNS Number : 0303Q Derwent London PLC 28 July 2010 \n \n\n3PRESS RELEASE\n \n28th July 2010\n \n \nDerwent London plc (\"Derwent London\" / \"Company\")\n \nDERWENT LONDON ANNOUNCES MAJOR WEST END ACQUISITION OF c250,000 SQ FT CENTRAL CROSS, LONDON W1\n \n \nDerwent London, the specialist central London property investment and regeneration REIT, has exchanged contracts for the acquisition of Central Cross, 18-30 Tottenham Court Road and 1-2 Stephen Street, London W1 for £146 million before costs.\n \nSituated on a 2.1 acre (0.85 ha) site, the 251,000 sq ft (23,300 sq m) freehold property comprises 216,000 sq ft (20,100 sq m) of offices, 24,000 sq ft (2,200 sq m) of ground floor retail space fronting onto Tottenham Court Road and an 11,000 sq ft (1,000 sq m) cinema. The annual rental income is £8.1 million from 21 leases to 10 tenants with an average rent of £34 per sq ft (£366 per sq m) and an average lease length of six years. The net initial yield is 5.5%. 33% of the rental income is secured beyond 2020 whilst 38% is subject to lease expiries or breaks before December 2011. Both the property's office and retail elements offer significant opportunities for future refurbishment and improvement.\n \nThe three principal tenants, who account for nearly 90% of the rental income, are: FremantleMedia Group, one of the largest creators and producers of entertainment brands in the world and who are 90% owned by Bertelsmann AG; Ascent Media, a global media company; and S Technologies, the owner of Skype.\n \nThe transaction involves the acquisition of the units in Merbrook Central Cross Property Unit Trust, a Jersey Property Unit Trust which holds the property. The units will be acquired from TCR 1 Limited and TCR 2 Limited, Guernsey registered companies. The acquisition will be financed from Derwent London's existing bank facilities.\n \nJohn Burns, Chief Executive, Derwent London, commented:\n \n\"We are delighted to have acquired Central Cross which is an excellent addition to our central London portfolio. This acquisition provides strong income at economic rental levels, together with opportunities for active management, future refurbishment and improvement of the office space which Derwent specialises in. We will also be l...