UK REIT Workspace Group has exercised an option to buy an office building in the Fitzrovia district of London. The investment volume of £98 mln (€113 mln) reflects a net initial yield of 4.6%.
Workspace is acquiring the freehold of 13-17 Fitzroy Street, W1 from design and engineering firm Arup.
The property provides 92,700 sq ft (8,600 m2) of net lettable space over lower ground, ground and six upper floors, and it is being acquired at a capital value of £1,063 per sq ft. It is occupied and let to Arup until September 2022 at an annual rent of £4.9 mln (£53 per sq ft), rising to £60 (per sq ft) in March 2021.
However, Arup is relocating from the building and the lease provides for the early exit with effect from September 2020 with a rolling nine-month break option. Workspace intends to reposition the building as a multi-let business centre and aim to 'capture significant rental uplifts'. The floor plates are laid out for the creation of different sized units around a central atrium which offers natural light throughout the building.
Located in the heart of Fitzrovia, the office building is just over 300 metres from Goodge Street and Warren Street stations on the London Underground and a short walk from the new Crossrail station at Tottenham Court Road.
Workspace is funding the transaction from existing facilities.
