Great Portland Estates has acquired three office and retail properties in the West End of London for £71 mln (€93 mln).
The London-listed investor took control of the assets by acquiring the debt-free holding company, 73/77 Oxford Street Ltd. The gross capital commitment is £72.3 mln, which reflects a day one yield of 2.1%. This increases to 3.2% once reversions have been captured, based on CBRE's current view of rental value.
The investment includes the freehold interest in GPE's existing development at 73/89 Oxford Street. The property is under construction and will comprise 8,360 m2 of retail and office accommodation. Before acquisition, GPE had a 250-year head lease from February 2011, geared to 10% of rents received following practical completion of the scheme. The rent prior to practical completion is £620,000 per annum.
The second and third elements of the deal comprise the virtual freehold of a 440 m2 office and retail property at 95 New Bond Street, and the head leasehold interest at 96 New Bond Street. The head leasehold interest for 96 New Bond Street expires in 2045 at a fixed ground rent of £2,250 per annum. The property comprises 440 m2 of retail accommodation. Both premises are let together on a single lease to Victorinox.
GPE said the total annual rent of £880,000 is significantly below CBRE's current estimate for the location.
