Rockspring Property Investment Managers has sold Gateway House in Richmond, London, for £44 mln (€53 mln), reflecting a net initial yield of 5%.

Rockspring Property Investment Managers has sold Gateway House in Richmond, London, for £44 mln (€53 mln), reflecting a net initial yield of 5%.

The buyer is a private client of Cushman & Wakefield.

Gateway House, which was owned by the Rockspring UK Value Fund, comprises 62,000 sq ft (5,760 m2) of office space, fully let to Reed Exhibitions, seven retail units and a multi-storey car park.

Since acquiring the property in 2011, Rockspring has added value through a number of asset management activities, including the letting to Sainsbury’s Local on a new 20-year lease; re-gearing the lease with office tenant Reed Exhibitions on improved terms and for additional space; settling a rent review for the car park at a 70% uplift over passing rent and acquiring the head leasehold interest, thereby increasing the tenure from 82 to 982 years.

Gateway House is the final asset to be sold from the St. Martin’s South East office portfolio, which comprised five office properties acquired by the fund in February 2011 for £48 mln.

Rockspring has successfully sold all of them, achieving a portfolio level Internal Rate of Return in excess of 20% per annum.

Richard Bains, Rockspring UK Value Fund Manager, said: 'We continue to see opportunities in the market where our unique skill-set and experience of the UK real estate sector will allow us to generate income and value growth, and aim to take advantage of these for investors in our next vehicle, UK Value Fund 2, for which we are currently fundraising.'

Montagu Evans acted for Rockspring, while Cushman & Wakefield acted the purchaser.