UK REIT Helical Bar has exchanged contracts to acquire the Bower development at 207-211 Old Street, London for £248 mln (€353 mln).

UK REIT Helical Bar has exchanged contracts to acquire the Bower development at 207-211 Old Street, London for £248 mln (€353 mln).

The vendor is a joint venture company owned by Helical and an affiliate of Crosstree Real Estate Partners.

Simultaneously, Crosstree has agreed to acquire the joint venture’s retail parade, at 183-213 Old Street, London, for £23 mln.

Under the transaction, Helical will acquire 207 Old Street Unit Trust and 211 Old Street Unit Trust and dispose of its interest in the Old Street Retail Unit Trust, the asset-owning entities, for a combined net £76 mln payment to Crosstree, plus refinancing the existing external debt of £88 mln.

Helical will fund the acquisition through existing cash resources of £18 mln and new bank finance of £200 mln, £146m of which will be drawn down to complete the purchase with £54 mln available to fund the redevelopment of 207 Old Street.

This second phase will provide 170,000 sq ft (15,800 m2) of office space and 7,300 sq ft of retail/restaurant space, on completion of the works due in Q4 2017. It has a construction budget of £70 mln.

Phase One of The Bower development is substantially pre-let with agreements for lease signed on 92% of the redeveloped space generating £7.2 mln per annum, once rent free periods have expired.

'We have recently sold our London office assets at Enterprise House, Clifton Street and Artillery Lane and this acquisition of The Bower restates and reinforces our commitment to London, and in particular the ‘Tech Belt’ area. The acquisition will increase our London holdings to 55% of our investment portfolio,' said Gerald Kaye, Helical’s development director.

Deutsche Bank is supporting the joint venture’s project. Hatton and JLL are marketing the scheme.