British Land announces that it has agreed to purchase Wardrobe Court, EC4, a 71,000 sq ft residential investment property in the heart of the City of London for £57 million, representing a capital value of £800 per sq ft.
Situated a few minutes walk from St Paul’s Cathedral, Wardrobe Court is one of the few surviving early 18th century squares in the City of London. Sympathetically re-stored, Wardrobe Court is a Grade II listed cluster of buildings set around a cobbled courtyard, comprising 92 studio, one, two and three-bedroom serviced apartments along with a retail and office unit.
The majority of the property is let to BridgeStreet, a leading serviced apartment operator, until December 2014 with rent subject to annual uplifts in line with RPI, representing at purchase, a net initial yield to British Land of 4.7%. At the end of the lease, we have an opportunity to renew or relet as serviced apartments at a significantly higher rent, or to upgrade and sell-off profitably as private residential properties.
British Land has a long history of owning, managing and financing residential property and over the past two years, we have been progressively increasing our exposure to Central London, a market where investor and occupier demand has been and remains strong. With the purchase of Wardrobe Court, our exposure to high-end residential properties in Central London now stands at over £250 million. We have successfully pre-sold £89 million of our residential developments over the past year, including 70% of the luxury residential apartments we are developing as part of the NEQ development at Regent’s Place.
Tim Roberts, Head of Offices at British Land said: "With this acquisition, we have acquired a collection of unique and well located residential properties, leveraging our experience in the London residential market. We are confident we can either attract a higher rent from a serviced apartment operator or upgrade and sell as private residential at a significant premium to our entry price."
CB Richard Ellis acted for the vendor.