M&G UK value-add fund makes first London buy
M&G Real Estate’s UK value-add fund has made its first London acquisition, buying the freehold of Gate House in Clerkenwell, EC1, for £28.5m from Alexandria Bay.
The price paid reflects a net initial yield of 5.25% with a capital value of £1,000 per sq ft.
Located on St John’s Square, the 27,000 sq ft 1960s office block has planning consent for additional space on the third and fifth floors and potential for a new sixth floor.
M&G Real Estate’s UK value-add fund has made its first London acquisition, buying the freehold of Gate House in Clerkenwell, EC1, for £28.5m from Alexandria Bay.
The price paid reflects a net initial yield of 5.25% with a capital value of £1,000 per sq ft.
Located on St John’s Square, the 27,000 sq ft 1960s office block has planning consent for additional space on the third and fifth floors and potential for a new sixth floor.
Paul Crosbie, manager of the M&G UK Enhanced Value Fund, said: “Gate House marks the fund’s first investment into London in an area with exciting potential for further growth once Crossrail opens.
“There has been steady growth in the TMT [technology, media & telecoms] sectors in London over the past few years and the continued appeal of Clerkenwell suggests demand will strengthen as transport connectivity improves.
“With planning consent to enhance what is already a strong asset, we expect Gate House to benefit from good rental growth and capital appreciation in the short to medium term.”
It is the fourth acquisition by the fund, which launched in February this year to take advantage of the current heightened levels of risk aversion created by the Brexit process, targeting well located, mispriced assets with strong underlying fundamentals and asset management opportunities.
Anton Page advised M&G Real Estate.
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