Derwent London sells Johnson Building

Derwent London sells Johnson Building – Derwent London has exchanged contracts to sell its 192,700 sq ft freehold interest in Johnson Building, 77 Hatton Garden and 5-7 St Cross Street EC1 to Eurazeo Patrimoine, the real assets division of Eurazeo. The headline price is £170m before rental top-ups of £2.4m for incentives and vacant space.

The office and retail complex was acquired in 2000 for £29m, and in 2006 the Group completed a significant refurbishment designed by architects AHMM which increased the lettable area by 53%.

The total rent passing from the multi-let buildings is £7.3m pa with approximately 40% of the income expiring in 2021.

The sale price represents a net initial yield of 4.1% on the passing rent, which will fall to 2.5% allowing for 2021 lease expiries. The disposal price, net of incentives, is 4% below the June 2020 book value before costs. This crystallises an IRR of 10% pa to the group since acquisition.

New tenant in Tea Building

Separately, Derwent London says that TransferWise has agreed to extend and expand its occupation at the Tea Building in Shoreditch E1. TransferWise currently occupies 31,700 sq ft on a lease due to expire in December 2023 with a tenant break in May 2021 and has committed to a new five-year lease on 48,950 sq ft, an increase of 54%. The new rent is in line with the passing rent and ERV. There is an overall rental incentive equivalent to an 11-month rent-free period.

DLN : Derwent London sells Johnson Building

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