UK business space specialist Workspace Group has completed its acquisition of the Centro estate in London's Camden with the purchase of Centro 1 & 2 for £76.5 mln (€87 mln), reflecting a net initial yield of 4.9%.
In January, it exchanged contracts on five of the seven Centro buildings for £109 mln, at a net initial yield of 4.2%.
'This strategic purchase allows us to consolidate our presence in Camden,' said Jamie Hopkins, Workspace's CEO.
'It provides an exciting and scale opportunity for our offer to this vibrant and dynamic area of London, as we continue to grow the business through selective acquisitions and delivery of our extensive refurbishment and redevelopment pipeline.'
Centro 1 & 2 are two freehold buildings providing 85,000 ft2 (7,900 m2) of warehouse-style offices, plus a roof terrace and gym. Its five tenants, including the UK head offices of Hugo Boss and French Connection, pay a passing rent of £53.70 per ft2. There is 12,000 ft2 of vacant space, which has recently been refurbished.
According to Workspace, the transaction will be funded from existing facilities and increases the pro forma LTV (loan-to-value), based on the 30 September 2017 property valuation, to 26%.
The entire Centro estate represents 216,000 ft2 of net lettable space for a total purchase price of £185.5 mln.
'We see immediate income opportunity with 33,000 ft2 of net lettable space vacant on acquisition and significant potential to reposition the estate over the medium term,' concluded Hopkins.