Central London property trust WELPUT, which is managed by Schroder Real Estate and advised by Quintain Estates and Development plc, has announced two significant transactions involving £160m. The deals take the total value of WELPUT’s acquisitions and disposals in the year to date to around £340m.
The firm has exchanged contracts on the sale of 16-17 Connaught Place W2 for £110m, to funds managed by asset and investment management company GWM Group, reflecting a net initial yield of 4.7% and a capital value of £1,344 per sq ft. The 81,859 sq ft property is multi-let to a range of tenants.
In a separate deal WELPUT has acquired the long leasehold interest in 7 Bishopsgate from clients of TH Real Estate for £48.9 million, reflecting a net initial yield of 4.9% and a capital value of £873 per sq ft.
The 56,020 sq ft of Grade A office building has been recently refurbished and is currently multi-let on rents ranging from £42.50 per sq ft to £53.50 per sq ft. With two vacant floors available, WELPUT will be able to offer flexible accommodation in the City market where the supply of sub-10,000 sq ft floor plates is restricted.
Ker Gilchrist, Head of Investment at Quintain, said: “WELPUT acquired Connaught Place in 2005 and since then has undertaken significant refurbishment and fully let the building in the run up to the sale. Having completed our business plan, we decided to take the opportunity to offer the asset to the market and capitalise on the strong investor interest in well-established West End buildings.”
Head of UK Investment at Schroder Real Estate, Nick Montgomery, commented: “The disposal of Connaught and the immediate redeployment of proceeds into the City is in line with WELPUT’S strategy following the fund’s modernisation in 2014. 7 Bishopsgate offers good fundamentals in terms of location and specification and provides an opportunity to capture rental and income growth over the short to medium term.”
Gennaro Giordano, Managing Partner at GWM Group, said the acquisition of 16-17 Connaught Place is in line with the company’s strategy which aims to offer exposure to core and core plus assets in the capital and other major cities. He added that GWM expect the asset to benefit further from the upcoming regeneration of the area surrounding Marble Arch.
Peter Neal, Senior Portfolio Manager at TH Real Estate, said the disposal of 7 Bishopsgate provides the firm with an attractive return on the property, which was acquired by their London office fund CLOFII in 2011, and the sale proceeds will be returned to investors.
WELPUT was advised on the sale of Connaught Place by Strutt & Parker and CBRE. CBRE also advised on the purchase of 7 Bishopsgate. Cushman & Wakefield and Astezar Capital advised GWM Group and TH Real Estate was advised by Savills.
