Barts & The London Charity have put up for sale 19-21 Great Tower Street, a freehold office and retail investment in the City of London.
Gryphon Property Partners has been instructed to sell the EC3 asset for £10.5m, reflecting a net initial yield of 5.36% with a rental top up at £42.50 per sq ft on the 2nd and 4th floors (assuming purchaser's costs of 5.8%). This reflect a capital value of £567 per sq ft and a net reversionary yield of 7.1% assuming the retail is let at market levels.
The freehold office and retail investment has opportunities for rolling refurbishment, potential change of use and more substantial works to include additional floors subject to planning.
As freeholders, Barts bought in the long leasehold interest a couple of years ago.
The 18,524 sq ft property sits on the south side of Great Tower Street, opposite the London Underwriting Centre, and is arranged over the lower ground, ground and seven upper floors.
It is multi-let to nine tenants producing a total rent of £595,076 per annum.
The retail space totals 3,870 sq ft producing £167,415 per annum and representing 28% of the total income. The average weighted unexpired term certain of the retail element is approximately 10.4 years and 10.9 years until expiries.
The office accommodation totals 14,654 sq ft and is multi-let on a floor by floor basis. The second floor is vacant and the fourth floor tenant has served notice, with expiry on 30 November 2014. An 18 month rental top up is proposed on these two floors at £42.50 per sq ft.
The average weighted unexpired term certain of the office element is approximately 1.2 years and 1.7 until expiries (including the rental top ups).
The office rent totals £427,661 and breaks back to a low rent of £29.18 per sq ft including the rental top ups
Article written by James Buckley, CoStar News, 29th September 2014.