RDI has completed the disposal of 127 Charing Cross Road for a headline price of €67.3m (£59.25m) to Nomura Real Estate UK Limited. The disposal price reflects a 1% premium to the 31 August 2020 valuation, a net initial yield of 3.1%, based on the contracted rental income, and a capital value per of €1,682 (£1,481) per ft² on the existing area. The property was acquired as part of the AUK portfolio acquisition in March 2016 for €48.4m (£42.6m). The disposal price, therefore, reflects a 39.1% increase in value since acquisition. The growth in value has been supported by a successful asset management strategy including securing full planning permission, which provides an opportunity to increase the overall area of the property by 41.1% through the development of three additional floors.
Stephen Oakenfull, CEO of RDI commented: “This disposal marks the conclusion of a well-executed and successful asset management plan designed to enhance the value of an income-generating asset. We believe that the sale captures a significant proportion of the asset’s potential value and provides us with the ability to recycle capital into opportunities with stronger risk-adjusted returns. In the meantime, the proceeds of this transaction further strengthen the balance sheet where we now have cash and available facilities totalling approximately €312.5m (£275m) to execute on our strategy.”
