Istithmar completes West End purchase

Istithmar PJSC, the investment house based in the United Arab Emirates, has completed the purchase of Marcol House, London, W1 and has re-branded the property as Cavendish Gate. The £64 mln (EUR 95 mln) transaction was originally announced in January. Debt funding for the acquisition was provided by German real estate bank Eurohypo, which provided a £35 mln acquisition facility that allows Istithmar PJSC to hold the asset whilst working on future strategies to increase its value.

Clients of Cordea Savills and CBRE Investors sold the freehold redevelopment opportunity at Marcol House to the Property Merchant Group, backed by Istithmar, in January for £64 million, reflecting a net initial yield of 2.4%. The comprises three self contained office buildings totalling 7,000 m² and has potential for a further 9,500 m² Grade A office space. In January Marcol House was let on 21 leases, at an average rent of £240 per m2, with 20 leases expiring or an option to break in November 2008. The total annual rent was £1.6 mln.

Marcol House used to belong to Land Securities, now the largest property company in Europe. Land Securities traces its origins back to 1944, when its founder Harold Samuel purchased Land Securities Investment Trust, which owned three houses in Kensington and some government stock. Three years later, Land Securities decided to concentrate on commercial property in and around the West End of London and to dispose of its residential holdings. The company acquired Marcol House for £250,000 and City House that year.