Derwent London has exchanged contracts to acquire the 100-year leasehold interest in the two buildings at 230 Blackfriars Road SE1 in Southwark for £55.0m before costs.

The ground rent for Conoco House and Quadrant House at 230 Blackfriars Road is fixed at £5,000 pa.

Conoco House comprises 60,300 sq ft of office space and is multi-let at a passing rent of £2.1m (£41 per sq ft on average) with all leases expiring in 2025, with tenant breaks in 2023. The net initial yield is 3.5% which would rise to c.4.2% on letting the 9,400 sq ft of vacant space. The acquisition cost, excluding Quadrant House, equates to £880 per sq ft on the existing space.

Quadrant House is a 36-unit residential building let to 2074 at a nominal rent.

The buildings occupy a 0.8-acre site that includes 30 car parking spaces. The site has medium-term potential for a substantial office-led development.

Paul Williams, Chief Executive of Derwent London, commented: “We are delighted to have exchanged contracts to acquire 230 Blackfriars Road, an exciting addition to our medium-term development pipeline, and which establishes a new village for us in the heart of South London’s Innovation Corridor and Health Science cluster in Southwark.”