Derwent inks £170m Johnson Building sale
Derwent London has exchanged contracts to sell the Johnson Building in Farringdon, EC1, to French investment management business Eurazeo Patrimoine and Arax Properties for £170m.
It is the pair’s second acquisition since agreeing a partnership last year, with a debut deal at Euston House. Eurazeo has committed €80m (£72m) in equity to this latest buy.
The sale price, before rental top-ups of £2.4m, is 4% below the June 2020 value and equates to £822 per sq ft.
Derwent London has exchanged contracts to sell the Johnson Building in Farringdon, EC1, to French investment management business Eurazeo Patrimoine and Arax Properties for £170m.
It is the pair’s second acquisition since agreeing a partnership last year, with a debut deal at Euston House. Eurazeo has committed €80m (£72m) in equity to this latest buy.
The sale price, before rental top-ups of £2.4m, is 4% below the June 2020 value and equates to £822 per sq ft.
It reflects a net initial yield of 4.15%, falling to 2.5% next year with lease expiries, and an IRR of 10% pa since acquisition.
The 192,700 sq ft office and retail estate comprises five buildings at 77 Hatton Garden and 5-7 St Cross Street. It is close to Farringdon train station and Underground in an area of high growth for technology, media and telecoms businesses.
The Johnson Building is 94% let with tenants including WPP’s Grey London.
Derwent acquired the building in 2000 for £29m and completed a refurbishment with AHMM in 2006. It will reinvest the proceeds into new developments including 19-35 Baker Street, W1, which is scheduled to start on site in 2021.
Renaud Haberkorn, managing partner of Eurazeo and head of Eurazeo Patrimoine, said: “This second acquisition in London reflects our capacity to source opportunities in complex environments and our strong convictions in the London real estate market which we believe offers today very interesting value opportunities.”
Giles Morse, partner at Arax Properties, said: “As with Euston House, the Johnson Estate offers the joint venture the ability to capture the momentum of a burgeoning submarket with improving infrastructure whilst having excellent downside protection.”
Harris Associates advised Eurazeo Patrimoine and Arax Properties.
To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette
Photo: Derwent London
