Derwent London has purchased the freeholds of 9 and 16 Prescot Street, Whitechapel E1 for £23.0m before costs. This reflects a capital value of £207 per sq ft (£2,230 per sq m), with a total passing rent of £1.3m pa and a net initial yield to the Group of 5.4%.
9 Prescot Street is an office building of 102,700 sq ft (9,540 sq m) which is let until January 2015 to Co-operative Bank plc at a low passing rent of £11.50 per sq ft (£124 per sq m). 16 Prescot Street is a property of 8,300 sq ft (770 sq m), occupied by a restaurant paying £9.00 per sq ft (£97 per sq m).
These acquisitions are in an improving area of Whitechapel close to Tower Hill, Aldgate and Aldgate East stations. They offer asset management angles in the short term whilst providing an interesting future refurbishment opportunity. 9 Prescot Street has many of the features of the Tea Building of ten years ago, namely low rents, good volume and floor plates yet in need of rejuvenation.