CLS has exchanged contracts to acquire 9 Prescot Street, London E1 for €62m (£53.85m) excluding costs. The freehold property comprises 96,948ft² (9,007m²) of multi-let office space over seven floors and is 100% let to four tenants with a weighted average unexpired lease term of 2 years to breaks. It is located on the fringe of the City in the Aldgate area, which continues to undergo significant regeneration, including the new Chinese Embassy at the former Royal Mint site, and is close to multiple key transport links including Fenchurch Street, Tower Hill, Aldgate East and Shadwell stations.
The property, which is being acquired at a capital value of €640 (£555) per ft² and a net initial yield of 4.5%, has a substantial reversionary rental upside to deliver an estimated yield approaching 8% through active asset management. Current contracted rental income of €2.95m (£2.56m) equates to €30.47 (£26.41) per ft² and CLS intends to undertake a substantial refurbishment to deliver high-quality space in an improving area with limited supply.
Fredrik Widlund, Chief Executive Officer of CLS, commented: “This acquisition is a clear demonstration of our ability to undertake transactions on an opportunistic basis where we can utilise our asset management expertise to deliver value over the long term in line with our strategy. The property’s excellent location and attractive potential makes this an exciting acquisition for CLS.”
