Orchard Street makes Â£85m midtown purchase.
06 January 2014
Orchard Street Investment Management, the specialist commercial property investment manager, has exchanged contracts on the acquisition of 26 Red Lion Square on behalf of clients, from Legal & General Property ("LGP") for £85.1 million representing a net initial yield of 5.09%.
Located in midtown, close to the junction of Kingsway and High Holborn and only 250 metres from Holborn tube station, the building is prominently located on the north east corner of Red Lion Square and has substantial frontage onto Theobalds Road.
Originally developed by Stanhope Kajima Developments in 1989, LGP recently concluded a comprehensive £7 million refurbishment of the property to create a contemporary headquarters office building. Comprising approximately 104,204 sq ft of Grade A office and ancillary accommodation, arranged over lower ground, ground and six upper floors, the asset provides flexible office floorplates (ranging from 11,000 sq ft to 17,500 sq ft) positioned around a central glazed atrium, together with a 2,040 sq ft retail unit fronting Theobalds Road.
Following the refurbishment, the offices are nowfully let to four tenants, comprising Cable & Wireless, Group M (Mediacom), Haysmacintyre and TSL Education Ltd, on 10 year lease terms from 2013.
Additional works were carried out to improve the green credentials of the building and all leases now include green clauses.
Gary Felce, Partner at Orchard Street, commented:
“This is a high quality multi-let office property located in a core market which we believe is set for further growth, supported by the proliferation of businesses moving to Midtown and the forthcoming Crossrail station which will be opening just a short walk away at Tottenham Court Road.”
Mark Russell, Senior Fund Manager at Legal & General Property, commented: “Since acquiring the property on behalf of the Managed Property Fund in 2010, we have undertaken an extensive asset management programme to both extend occupational lease terms and to increase rental values. Having very successfully executed these initiatives a sale of this asset now permits reinvestment into fresh opportunities.”
Savills acted for LGP and Cushman & Wakefield represented Orchard Street.
Notes to editors
Legal & General Property
Legal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages approximately £433bn in assets on behalf of more than 3,100 clients (30 June 2013) and provides products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 16 separate funds or vehicles and two segregated mandates with an aggregate asset value of £11bn as at 30 June 2013. These funds include:
Specialist Pooled Funds
The Leisure Fund Limited Partnership; Industrial Property Investment Fund; Arlington Business Parks Partnership; and the English Cities Fund
Single Asset Vehicles
Bracknell Regeneration Partnership; Central Saint Giles Partnership; Performance Retail Limited Partnership and Warrington Retail Limited Partnership
Life Fund; Linked Pensions; Linked Life; Managed Fund; Property Unit Trust; UK Property Income Fund; LPI Income Property Fund and the Hybrid Property Fund.
LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance across the sector. Owing to its size, diversity and penetration, it benefits from best in class banking and property industry contacts which, along with its wealth of in-house skill and expertise, have enabled it to continue to attract and secure high quality market opportunities. Taking a client-centric approach, the business places the highest priority upon integrity and transparency, leveraging upon the significant resources provided by the wider LGIM platform. Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability. LGP’s sector specialisms cross all facets of the real estate market. In particular, the Company has a major development platform, responsible for delivering West End landmark building, Central Saint Giles, and Agar Street, its high profile Covent Garden office scheme, amongst others, and is currently involved in bringing forward a number of significant town-centre retail and leisure regeneration projects, including Bracknell, Trowbridge, Northampton and Eastbourne.
Legal & General Property Limited. Registered address: One Coleman Street, London EC2R 5AA. Registered in England 2091897.
For more information please contact:
PR Manager, Legal & General Capital and Real Assets, LGIM (Property, infrastructure and alternative finance)
t: + 44 (0) 203 124 2777
m: + 44 (0) 7718 395 279
About Legal & General
Legal & General Property Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 2091897.