UK-based fund manager Brockton Capital has instructed international real estate advisor Savills to sell the freehold of the Centro Building in London Nw1, a multi-let office building, considering offers exceeding £83 mln (€93 mln).
The price reflects a net initial yield of 5.22% and a reversionary yield of 5.76%.
The building, located in Camden, is let to four office tenants and one leisure operator, including Hugo Boss, Piercy & Co, Rocket Dog and French Connection, which occupy the property as their UK headquarters. Representing 85,000 ft2 (7,900 m2) of space, the building is currently let off an average rent of £52 per ft2 overall with an unexpired lease term of 7.1 years.
'The established home to leading international fashion brands Hugo Boss and French Connection, the landmark Centro Building is an exceptional warehouse style office headquarters building, situated in a strong growth location between Camden, King’s Cross and Euston,' commented Simon Ewart-Perks, director in the central London investment team at Savills.
'This is an opportunity to acquire arguably the best building in a chronically undersupplied Central London sub-market, which identifies very strongly with the fashion, media and tech industries.'
Brockton Capital's asset management strategy for the building included re-gearing Hugo Boss’ lease which was due to expire this year, to provide a new 12 year lease in exchange for surrendering the top floor which has been fully refurbished and is under offer to a Fin Tech business.
French Connection also surrendered the whole of the ground floor, permitting Piercy & Co to take a 10 year pre-let and the creation of a brand new reception and entrance to the building. The most recent letting was to F45, an Australian gym operator on a new 15 year lease, which will also provide brand new shower and locker facilities for all the occupants in the building.
According to Savills, prime rents in Camden have historically traded at a discount to King‘s Cross rents, although this gap is narrowing given both the ultra-low availability of Grade A space in Camden, as well as the fact that the area between the two sub-markets is continuing to be redeveloped.
Significant recent schemes have included the recently opened 1 million ft2 (93,000 m2) Francis Crick Institute, the proposed 3 acre, Rogers Stirk Harbour + Partners-designed extension to the British Library including the new Alan Turing Institute and, closer to The Centro Building, the new Bennetts Associates-designed 900,000 ft2 (83,600 m2) mixed-use office, hotel and residential scheme by Ted Baker at Canal Reach.
