Evans Randall completes Drapers Gardens acquisition

Evans Randall has completed its acquisition of the recently developed Drapers Gardens building in the City of London for £242.5 million (EUR 276.6 mln.), from a joint venture including Canary Wharf Group and a subsidiary of the Morgan Stanley Real Estate Funds (MSREF). The deal was first announced in August.

The prime 27,000-m² office building is let in its entirety to BlackRock on a 25-year lease. Evans Randall invested in the transaction together with a number of long-standing private clients. Eurohypo provided senior debt and Pramerica Real Estate Investors provided mezzanine debt for the acquisition.

Kent Gardner, CEO of Evans Randall, said: 'In a market where many transactions are constrained by debt and equity supply, we are delighted to have acquired such an excellent asset. The quality, scale and growth potential of Drapers Gardens fits well with our investment strategy and we continue to seek similar assets in prime locations.'

The prime 27,000-m² office building is let in its entirety to BlackRock on a 25-year lease, with five-yearly upward only reviews, at a gross annual rent of £13.5 mln. The full purchase price reflects an initial yield of 5.2%. At first rent review, the rent will increase by a minimum of 2.5% per annum and a maximum of 4.5% per annum, bringing certainty of rental growth.

Evans Randall's retained adviser CB Richard Ellis represented them in the transaction.

Michael Evans, chairman of Evans Randall, said: 'Drapers Gardens is the latest in a series of significant transactions for Evans Randall in what has been a good year for us. We completed the Riverbank House development and secured a new 25.5-year lease to Man Group plc. In addition, we refinanced 5 Canada Square, one of our prime Canary Wharf assets, and sold Milton Gate and Condor House, the latter achieving a record yield in this cycle.'