Family firm eyes City deal after Tory HQ buy
Family-owned investment firm Charles Street Buildings is looking to expand its London presence having returned to the market this month after a three-year hiatus.
The firm, which purchased the Conservative Party’s campaign headquarters for £51.5m from Aviva Investors, is interested in property in the City of London, as well as in other major regional cities.
“We don’t have a building in the City of London, and that’s somewhere where we’d look. We’d like to have a City office as we like historic buildings with character,” said director and group solicitor Joseph Murphy, whose father Hugh Murphy is chairman of the business. “We do have plans to invest more in London but wouldn’t preclude investment in other large regional centres.”
Family-owned investment firm Charles Street Buildings is looking to expand its London presence having returned to the market this month after a three-year hiatus.
The firm, which purchased the Conservative Party’s campaign headquarters for £51.5m from Aviva Investors, is interested in property in the City of London, as well as in other major regional cities.
“We don’t have a building in the City of London, and that’s somewhere where we’d look. We’d like to have a City office as we like historic buildings with character,” said director and group solicitor Joseph Murphy, whose father Hugh Murphy is chairman of the business. “We do have plans to invest more in London but wouldn’t preclude investment in other large regional centres.”
Murphy added that before the Tory HQ deal he looked at a property in the City of London but turned it down as it was let to a co-working operator. “I looked around a building in the City near Lloyds. It was quite a nice building but it was going to be leased to a fairly new serviced office firm.
“I asked about the covenants and found out that every single one was a special purpose vehicle. We don’t want to have to look over our shoulder, and we would with Regus, WeWork and others with SPVs.”
Many co-working companies use special purpose vehicles to sign up to leases rather than provide a corporate guarantee as a covenant.
Other London offices that Charles Street Buildings has acquired over the past few years include 13-14 Curzon Street, W1, from Standard Life for £39.25m – a 3.25% yield.
Conservative approach
Currently, Charles Street Buildings owns a 6.3m sq ft portfolio, which is primarily focused on warehouses (45%), followed by industrial (28%), offices and retail. More than 50% on the group’s rental income is derived from its Leicester base in the East Midlands.
The firm is led by Murphy Bros co-founder Paddy Murphy’s son Hugh.
The business takes a prudent approach towards its rent roll, said Murphy. “Our rent roll runs at around £45m per year. We don’t have any leveraging throughout the portfolio and we are not a flashy family. We don’t pay ourselves ginormous sums and there are no Ferraris in our car park. We put most of the rent roll back into the business.”
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