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A pair of South Bank offices have been acquired for a combined sum of £82 million, as investments continue to flood into the London submarket.
Firstly, CCLA Investment Management has purchased Palace House from Schroder UK Real Estate Fund (SREF) for around £50 million. The block comprises 45,012 sq ft over five floors, with Caffe Nero occupying the ground level, and office space above fully let to Kaplan Estates until 2033. It generates about £2.6 million rent annually, equating to £58 per sq ft and reflecting a yield of approximately 5%.
Secondly, Darin Partners has purchased five-storey Kaplan House from an Indian family office for £32.5 million in an off-market deal. The five-storey block is fully let to Kaplan Financial until 2032.
Chief executive of Darin Partners, David Bell, says: “The South Bank submarket has been one of central London’s best-performing office markets over the past five years,” said… With supply levels tight and vacancy rates below 3%, we believe the area will continue to see rental and capital growth over the short to medium term.”
Adding that the firm intends to invest “another £150 million to £200 million before the end of the year… With Brexit playing out, we see the next six to 12 months as a buying opportunity for our Gulf clients, who can take advantage of an attractive exchange rate, low financing rates and a less congested buying market, in one of the most attractive global markets.”
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.