UK REIT Workspace Group has acquired the multi-let London property, Salisbury House, from US private equity firm Lone Star for £158.7 mln (€180 mln).

salisbury house rs

Salisbury House Rs

The deal comes just over a week after Workspace confirmed it was in talks to buy the office asset, which is located in the heart of the City of London close to the new Crossrail station at Moorgate and a short walk from both Liverpool Street and Bank stations.

The transaction equates to a capital value of £661.1 per sq ft, an average passing rent of £41.50 per sq ft and reflects a net initial yield of 5%.

Lone Star acquired the 240,000 sq ft (22,300 m2) property from Moorfield as part of the £1 bn 'Project Laser' portfolio in 2015.

The transaction will be funded from Workspace's existing resources, including an additional £100 mln of five-year revolver facilities provided by its bank lending syndicate, which has also provided a further £50 mln 364-day revolver facility for working capital purposes.

Commenting on the deal, Workspace CEO Jamie Hopkins said: 'This is a property we have tracked for some time and we are delighted to add it to our portfolio. The City has become an increasingly attractive area for our customers, and this well-located building is ideally suited to our operational model. The transaction emphasises our commitment to expand further through targeted acquisitions, adding to our existing pipeline of refurbishment and redevelopment projects, to deliver superior value and returns to shareholders over the long-term.'

Workspace, which specialises in London business space, has around 3.5 million ft2 (325,000 m2) of offices under management across the UK capital, serving more than 4,000 tenants. The REIT is listed on the FTSE 250 index.