Derwent London sells office, retail & residential assets in Covent Garden

REIT exchanges contracts with Capco on five properties for £68m

Article posted: 17 May 2011

Derwent London has exchanged contracts for the disposal of five freehold properties in Londons West End, to Capital & Counties Properties for £68m, before costs.

The properties comprise: 19a and 19-26 Floral Street, 26 and 27-32 King Street and 34 Rose Street. The adjacent properties, around a central courtyard, which front King Street and Floral Street, provide 71,900 sq ft of retail, residential and predominantly office space in Covent Garden, WC2. There are 10 tenants, producing an annual rental income of £2.5m. The disposal reflects a net initial yield of 3.5%.

The office component comprises 46,000 sq ft with tenants including F&C Asset Management and Beale & Co Solicitors. The retail element is 23,000 sq ft and there is 2,900 sq ft of residential. Retail tenants include Moss Bros, Hackett and Carluccio’s.

John Burns, Chief Executive Officer at Derwent London, commented: “We have owned these properties since 1999 and they have shown good capital appreciation during this period. However, having identified a purchaser with major holdings in the immediate area, we have taken the opportunity to recycle capital with this sale realising a value significantly above the December 2010 valuation.”

Ian Hawksworth, Chief Executive Officer at Capco, stated: “This acquisition is in line with our strategy to increase our ownership in Covent Garden through the acquisition of key properties and brings the value of our estate to over £700m. This deal will allow us to continue to add value to our holdings through the repositioning of King Street as the home of contemporary luxury within Covent Garden while also extending our residential and office portfolio.”

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Posted by Julie