(Alliance News) - Great Portland Estates PLC on Wednesday said it is paying GBP36.5 million for an acquisition of a long leasehold interest in London.
The price equals GBP847 per square foot at a net initial yield of 5.6%, the London-based property development and investment company added.
The 43,000 sq ft big building, located in London at 7/15 Gresse Street & 12/13 Rathbone Place, has been occupied by the Fashion Retail Academy since 2005. The academy will stay there until the timing for its relocation to a larger home is confirmed.
Meanwhile, Great Portland Estates announced three lettings in London totalling a combined rent of GBP2.0 million per year. One of the tenants is US-based TUMI Inc, an international accessories brand, relocating to a 3,570 sq ft office at Carrington House.
"These three deals show that London's retail market is turning a corner. With footfall now recovering to pre-pandemic levels ahead of the Elizabeth line opening in the coming months, it's an exciting time for these brands to be opening their latest stores in the capital," commented Sarah Goldman, senior portfolio manager at Great Portland Estates.
The lettings are on average 12% ahead of an estimated rental value made by commercial real estate services firm CBRE Group Inc in September 2021. It demonstrates "the increasing confidence in the continued recovery of the central London retail market by international and domestic retailers," the firm said.
The company further announced that a global investment firm has chosen the fourth floor of the One Newman Street building in London as its new European headquarters. The investment firm, which Great Portland Estates did not name, will commit to a 10-year lease for 13,800 sq ft of office space in line with September 2021 estimated rental value, Great Portland Estates explained.
"The transaction has demonstrated the increasing appeal of best-in-class workspace delivered by a partner that places a high value on sustainability, technology and customer service," said Richard Carson, Leasing Manager at Great Portland Estates.
Great Portland Estates shares were 0.9% lower at 720.82 pence each in London on Wednesday morning.
By Tom Budszus; tombudszus@alliancenews.com
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