3rd Dec 2024 11:18
(Alliance News) - Derwent London PLC on Tuesday announced it has bought the remaining stake in its proposed 50 Baker Street W1 scheme from Lazari Investments Ltd, its joint venture partner.
The London-based property investor and developer said the acquisition for GBP44.4 million, or GBP370 per square foot of consented floor area, reflected a 4.2% net initial yield at the current passing income of GBP2.0 million per year.
It highlighted the resolution to grant planning constant for an office-led scheme the size of around 240,000 square feet, which was received in August and is nearly double the existing floor area.
Works are expected to start on site in the first half of 2026, London Derwent Chief Executive Officer Paul Williams said.
The decision to buy the remaining stake to take full control was taken after "pre-letting success" at the adjacent 25 Baker Street W1 project, reflecting Derwent London's confidence in the strength of the West End occupational market.
"West End vacancy remains low and demand from high-quality occupiers across a broad range of business sectors continues to outpace supply," CEO Williams said.
"Underpinned by our confidence that the property cycle has inflected, we believe now is the time to acquire well-located regeneration opportunities. Our decision to take full ownership of 50 Baker Street reflects this and marks the conclusion of a successful partnership with Lazari."
Derwent London shares were 0.4% lower at 2,074.00 pence each on Tuesday morning in London.
By Tom Budszus, Alliance News slot editor
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