Oregan Financial, advised by CB Richard Ellis, have agreed the purchase of 10-18 Victoria Street in London. The property is fully let to the Secretary of State for a further 19 years without breaks. The deal was agreed at £70 million purchase price and represents a net initial yield of 4.2%. The building has recently undergone substantial refurbishment by the tenant, the Department of Trade and Industry, and is located in a prime office location in Victoria in London's West End.
10-18 Victoria Street
The nine-story property is located very close to Westminster and comprises an office building extending to approximately 7,348 m² with 13 car parking spaces. The building is within the earshot of the divisional bell of Westminster, used in the local neighborhood of the Parliament to signal a vote is occurring and that members in the Commons or the House of Lords have about eight minutes to get to the appropriate Division Lobby to vote for or against the motion. Victoria is also an important commercial center within Central London, accounting for approximately a quarter of the total office stock of the West End. The area benefits from excellent transport links and is very close to Victoria Station, a transport hub of London. The offices are currently let off a rent equating to £41.00 per ft². Prime Grade A top rents in the West End are currently over £100 per ft², with prime rents in Victoria at approximately £65.00 per ft².
The central London office market generally is experiencing huge rental growth at present. Due to the strong occupier demand in the capital, and the limited supply of new office space, this trend is forecast to continue for the medium term. While the Government is the dominant occupier in Victoria, other large commercial occupiers include Google and Microsoft.
Andrew Gunne of international property consultants CB Richard Ellis said, "Central London continues to be massively in favour for European investors given the fact that it is the most landlord friendly and liquid property market in Europe. This is backed up by extremely strong occupier demand with vacancy rates of under 3% in the West End in particular. The low level of availability together with a relatively small development pipeline coming through in the short term, means rents are being driven significantly higher"
Source: FD Tamesis