11th Nov 2014 07:50
LONDON (Alliance News) - Kennedy Wilson Europe Real Estate PLC Tuesday said it has bought the corporate vehicle that owns 111 Buckingham Palace Road in London for GBP204.3 million in shares.
The investor in real estate and real estate loans in Europe said the underlying real estate is valued at GBP207.5 million, reflecting a gross yield of 5.1% which is expected to rise to about 7% after it carries out its asset management plans.
The property is a 227,165 square foot office building located in Victoria, immediately over the mainline railway station and the Victoria Plaza shopping centre, fronting onto Buckingham Palace Road.
It is fully occupied with a weighted average unexpired lease term of 5.7 years to first break, and 6.7 years to expiry, and average passing rents are about GBP47 per square foot.
It is the London headquarters of Telegraph Media Group, which accounts for 54% of rental income, private equity group Advent International, TV and internet content group Scripps Network and serviced offices operator Regus.
"111 Buckingham Palace Road provides KWE with an exciting opportunity to enter the thriving Victoria market, where Grade A office vacancies sit at only 1.5% and prime headline rents exceed GBP80 per square foot," Chief executive Mary Ricks said in a statement.
"We aim to deliver material rental growth through the successful management of rent reviews and expiries and are targeting an income yield of c. 7% upon implementation of asset management initiatives," she added.
By Steve McGrath; [email protected]; @stevemcgrath1
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