British Land announced on Monday that it has exchanged contracts to buy 39 Victoria Street, a 7,000-m[sup]2[/sup] office building in London's West End, from Aviva Investors for £40.25 mln (EUR 44 mln). The investment volume represents an initial yield of 8.4%.
British Land announced on Monday that it has exchanged contracts to buy 39 Victoria Street, a 7,000-m2 office building in London's West End, from Aviva Investors for £40.25 mln (EUR 44 mln). The investment volume represents an initial yield of 8.4%.
The offices are let to the Bank of America until July 2012 at an average rent of £47 per square foot. Bank of America has fully underlet the building to nine sub-tenants, including Finmeccanica, Last Minute.com, Aegis Defence Services and the Labour Party. The building is fully occupied.
British Land said the property offers the opportunity for refurbishment on the expiry of the lease and re-letting in 2013, 'at a time when supply is more likely to be limited'. An alternative strategy would be to retain, and re-gear the leases of, the existing occupiers.
Tim Roberts, head of offices, said, 'The purchase fits in well with our strategy of balancing the office portfolio and increasing our weighting in the West End. The lease expiry sits comfortably in our portfolio which benefits from long and strong income. We plan to refurbish, but also we have the option to work with the existing strong line up of occupiers to renew their leases.'
