Derwent London has disposed of its freehold properties at 186 City Road EC1 and 35-37 Kentish Town Road NW1 for gross proceeds of £37.37m.
186 City Road is a 38,300 sq ft freehold office building situated north of the Old Street roundabout which Derwent London has sold for gross proceeds of £23.3m to a private buyer. The offices are fully let to a variety of tenants on leases expiring between August 2014 and March 2021 for a total headline rent of £1.01m pa. The net initial yield to the purchaser is 4.09% and reflects a net premium of 54.1% to the December 2013 valuation.
35-37 Kentish Town Road comprises 24,500 sq ft of offices in Camden which have been sold for gross proceeds of £14.07m to an institutional purchaser. 35 Kentish Town Road, which was refurbished in 2012/13, is fully let to Viacom on leases expiring in 2028 at a headline rent of £0.41m pa. 37 Kentish Town Road is fully let at £0.15m pa until 2019, with rolling breaks from June 2015. This disposal reflects a net initial yield to the purchaser of 3.79% and a 41.5% net premium to the December 2013 valuation.
John Burns, Chief Executive Officer of Derwent London, commented:
“The disposal of these smaller properties at a substantial premium to their December book values is in line with our strategy of taking advantage of a strong investment market by making opportunistic sales. They bring the gross proceeds from London sales for the year to £68.1m, representing a net surplus of 40.7% above December 2013 book value. We are recycling this capital into our extensive development programme.”