Derwent London has exchanged contracts for the disposal of five freehold properties in Covent Garden, London WC2, to Capital & Counties Properties (“Capco”) for £68 million, before costs. The properties comprise: 19a and 19-26 Floral Street, 26 and 27-32 King Street and 34 Rose Street. The adjacent properties, which front King Street and Floral Street, provide 71,900 sq ft of office, retail and residential accommodation around a central courtyard. There are 10 tenants, producing an annual rental income of £2.5 million. The disposal reflects a net initial yield of 3.5%.
The office component comprises 46,000 sq ft with tenants including F&C Asset Management and Beale & Co Solicitors. The retail element is 23,000 sq ft and there is 2,900 sq ft of residential. Retail tenants include Moss Bros, Hackett and Carluccio’s.
John Burns, Chief Executive Officer at Derwent London, commented: “We have owned these properties since 1999 and they have shown good capital appreciation during this period. However, having identified a purchaser with major holdings in the immediate area, we have taken the opportunity to recycle capital with this sale realising a value significantly above the December 2010 valuation.”
Ian Hawksworth, Chief Executive Officer at Capco, stated: “This acquisition is in line with our strategy to increase our ownership in Covent Garden through the acquisition of key properties and brings the value of our estate to over £700 million. This deal will allow us to continue to add value to our holdings through the repositioning of King Street as the home of contemporary luxury within Covent Garden while also extending our residential and office portfolio”.