Brockton Capital is preparing to put
its 33 Horseferry Road property in Victoria, SW1 up for sale for £215m, having
agreed a new 17-year index linked lease to the Department for Transport, CoStar
News can reveal.
been appointed to sell the 180,600 sq ft block for an initial
yield of 3.6%, reflecting a capital value of £1,190 per sq ft. The building is
being sold with 17 years of UK Government income with annual uplifts
linked to the Consumer Price Index, with a collar of 1% pa and cap of 4% pa.
value per square foot is around 10% below the five year average sales price in
the West End.
Department for Transport will continue to occupy the whole c.160,000 sq ft of
office space off an overall passing rent of c.£42.15 per sq ft having elected
to remain in a strategically important Government centric location. Recent
lettings in Victoria range between £75 per sq ft and £80 per sq ft, suggesting
a reversionary potential of around 60% on prime newly refurbished office space.
property also has an existing residential planning consent, granted in
2014, enabling the development of 122 luxury apartments and a further 23
affordable and 14 intermediate units.
agreeing the new lease, Brockton Capital with Stiff & Trevillion and
Landid, had drawn up plans for a comprehensive refurbishment, creating an
additional 60,000 sq ft over two additional floors within the existing
residential planning consent envelope.
The sale is
likely to attract a range of institutional and wealth preservation buyers from
across the globe. JLL also expects high demand from domestic long income and
bond investors wishing to offset future liabilities in a continued low interest
buyers will also benefit from Sterling’s circa 20% depreciation since the EU
Edgley, Partner at Brockton Capital LLP said: “We expect this asset to attract
widespread interest and demand, appealing to a broad cross section of both
wealth preservation investors and those proxy bond buyers for whom the c.5%
yield advantage between this income stream and a comparable index-linked gilt
is a compelling buy.”