Capco takes full control of London's Empress skyscraper

Capital & Counties Properties has taken full control of the Empress State Building office tower in London.

London-listed Capital & Counties Properties (Capco) exchanged contracts with UK REIT Land Securities Group for the 50% it did not already own for £117 mln (€137 mln).

The purchase price represents an initial yield of 6.2% and an equivalent yield of 6%.

Capco has also taken over Land Securities' share of the existing £131 mln debt facility, which will remain in place until maturity in August 2013. A new five-year debt facility is currently under negotiation.

The Empress State Building is a 31-storey building comprising 42,000 m2 of office space adjacent to the Earls Court & West Kensington Opportunity Area. It is fully let to the Mayor's Office for Policing and Crime until June 2019, with annual rental uplifts indexed to RPI with a floor of 2% and cap of 5.25%. The current passing rent is £14.9 mln.

Capco said that over the medium term it would consider opportunities to extend or review the existing lease. Alternatively it may examine whether the property is suitable for residential conversion in line with the plans for the Earls Court masterplan.