JR Capital Completes £33m Investment in Mid-Town
JR Capital, in partnership with a UK asset manager have completed the purchase of Thavies Inn House at 3-4 Holborn Circus, London EC1 for £33m.
The purchase of the 50,500 sq ft office building reflects a capital value of £650 per sq ft and a net initial yield of 4.3%. The property’s annual rent roll is £1.6m.
The property is located in a prime position in Mid-Town (Holborn), between the Financial District and the West End and directly next to Goldmans Sachs’ new 1m sq ft headquarter office building that is under construction and due to complete in 2018.
Nearby occupiers include the headquarters of Sainsbury’s, Deloitte, Taylor Wessing, Bird & Bird amongst other major global corporations.
100% occupied off low rents of £32 per sq ft, with grade B rental values nearby in the £40’s, there is an opportunity to increase rents by 20% to 30% in the short term.
An almost Island site and the best position on Holborn Circus there is also potential to obtain planning permission to increase the size to circa 80,000 sq ft and develop a brand new Grade A headquarter office building with a GDV in excess of £120m.
The location will benefit from the £18 Billion Crossrail train line which is due to open at Farringdon Station in 2018, less than 5 minutes’ walk away.
John Collier-Wright, Founder and Chief Executive of JR Capital said:
“We are pleased that this exciting transaction has completed. Thavies Inn provides a rare opportunity to develop a landmark office building next to the new Goldman Sachs HQ and existing Sainsbury’s and Deloitte global HQ’s. For a number of reasons, including the compelling supply and demand dynamics and ongoing infrastructure investment, Midtown is a location that we believe in. It’s a bridge between the City, West End, legal and media districts.
The temporary uncertainty in the market this year has created some attractive buying opportunities. There remains strong appetite from the Gulf to invest into UK real estate due to the political and economic instability in the region, a softening of prices in the UK over the past 12 months and the current weak sterling which represents a circa 20% discount to the long-term average. This is our third investment post Brexit and we intend to deploy a further circa £50m over the next few months whilst many of the UK funds and institutions have their foot on the brake”
You can read the full article featured in Property Week here.