JER Partners ('JER') has sold its long leasehold interest in Belgrave House, Buckingham Palace Road to Henderson's Central London Office Fund ('Henderson'). The property was developed in a joint venture with Grosvenor and comprises approximately 26,000 m² of Grade A office space arranged over lower ground, ground and six upper floors. The asset was held on a 150 year head leasehold interest from the Grosvenor Estate at a geared rent of 6.6% of net rents received.
The property is multi-let to 'blue-chip' tenants including Vitol, Google, BAA, Rentokil and American Express at rents of between €82 (£55) and €74,50 (£50) psf. The total rental income of the building on expiry of rent free periods will be €20,42 million (£13,70 million) per annum, and under the head lease the current rent received is €700 million (£6,68 million) per annum. Henderson acquired the long leasehold interest for the price of €133,6 million (£127,4 million)reflecting a net initial yield in excess of 5%.
Belgrave House, London
Malcolm Le May, President JER Europe, comments: 'Belgrave House has proved to be a very successful investment for JER. We are delighted to have been in partnership with Grosvenor on this prestigious project.'
Commenting on the purchase, Nick Deacon, Portfolio Manager of the Central London Office Fund, said: "The purchase of Belgrave House brings the total number of strategic acquisitions the Fund has purchased this year to over €288 million (£275 million), including the recent purchases of 50 Jermyn Street in the West End and 133 Houndsditch in the City."
JER were advised by Knight Frank LLP and Henderson's Central London Office Fund was represented by Savills.
Source: JER Partners