The scheme offers medium-term redevelopment potential and Land Securities intends reviewing the development strategy for the property, which benefits from an existing planning permission for an office development in the center of the site.
Contracts have also been exchanged for the purchase of the Red Lion Court, Bankside and Park Street, SE1 from Jesta Corporation for approximately Â£67m. The 11,920 mÂ² (128,324 ftÂ²) office building is let to Lloyds TSB and currently produces rent of Â£4.3m per annum, providing an initial yield of 6.4%.
This acquisition further consolidates Land Securitiesâ holdings in Southwark, where it is now developing Bankside1 on behalf of IPC Media and where it has planning consent for a further two commercial properties on the Bankside123 scheme adjacent to Tate Modern. Land Securities is also preparing plans for a residential development on a site nearby and will be developing some affordable housing at 20 Blackfriars Street.
Mike Hussey, Managing Director, London Portfolio at Land Securities, commented: âThe acquisition of City Forum will give us the opportunity to generate a good income return from a medium term redevelopment prospect. In due course we will submit a new planning application for the scheme with a significant residential component.
âRed Lion Court provides stable and improving income off a sensible rental base of Â£34 per square foot and will benefit from our own and othersâ considerable investment into the Bankside area.â
On the City Forum transaction, Jones Lang LaSalle acted for Land Securities and Franc Warwick acted for REIT Asset Management.
On the Red Lion Court acquisition, FPD Savills acted for the Jesta Corporation and Strutt & Parker acted for Land Securities.
Source: Land Securities