Hong Kong property investor Chanco Investment Group has struck its first deal in London with the acquisition of a mixed-use asset in the Covent Garden district. The investment volume of £65 mln (€82 mln) reflects an initial yield of 3.6% and a capital value of £1,360 per square foot.

Hong Kong property investor Chanco Investment Group has struck its first deal in London with the acquisition of a mixed-use asset in the Covent Garden district. The investment volume of £65 mln (€82 mln) reflects an initial yield of 3.6% and a capital value of £1,360 per square foot.

The 48,000 square foot (4,560 m2) property at 7-8 St. Martin’s Place, WC2 is being sold by Welput, a specialist trust investing in Central London offices, managed by Schroders and advised by Grafton Advisors.

Welput acquired the island site close to Trafalgar Square in 2011. The six-storey property comprises four floors of offices, ground-level retail, basement storage and car parking facilities. Current occupiers include the Post Office and Pret a Manger at retail level, and office occupier Redwood Publishing.

Nigel Kempner of Grafton Advisors, property adviser to the Welput trust, commented: 'Welput acquired this asset off-market with a view to considering a major refurbishment at the end of the occupational leases. This opportunity to sell to Chanco Investment Group provided the ability to maximise the value returns to unitholders whilst providing the opportunity to recycle the capital into new investments across central London, such as our recent Regents Wharf transaction.'

Welput was represented by Strutt & Parker. The purchaser was represented by CBRE.