City Office Building Sold for £18.3m
Helical Bar PLC
3 February 2000
HELICAL SELLS CITY OFFICE BUILDING FOR £18.3 MILLION AND REINVESTS £7 MILLION
IN A NEW REFURBISHMENT OPPORTUNITY
Helical Bar, the property investment and development group, today announces
the disposal of Aldermary House, Queen Street, London EC4 to Frogmore
Investments Limited for £18.3 million in cash. Aldermary House, which is
within the Bow Lane Conservation Area, is held on two leases from the Mercers'
Company, each having approximately 82 years unexpired at a combined fixed rental
of £10,600 per annum. The property comprises approximately 42,000 sq. ft. of
multi-let offices with a further 3,800 sq. ft. of retail and 5,500 sq. ft. of
storage.
The building produces a current income of £1.210 million per annum which is
projected to rise later this year on completion of pending rent reviews. All
occupational leases expire or have break clauses operative by the end of 2003.
The transaction shows a net initial yield of 6.3% rising to approximately 7.2%
on completion of the pending reviews.
Helical acquired the property in 1994 and undertook a rolling refurbishment
programme converting the ground floor offices to retail use. The letting
strategy was to multi-let on flexible leases and during Helical's ownership
rents doubled.
Part of the proceeds have been recycled into the purchase of 48 Gracechurch
Street, a highly prominent freehold property acquired for £7.05 million. The
property was previously owner occupied by NPI and Helical plan a refurbishment
with conversion of the ground floor into retail use.
The retail space, which is planned to be circa 5,000 sq. ft., will be a few
doors away from Marks & Spencer's new flagship City store and opposite the
proposed department store at 68 King William Street. The offices of
approximately 15,000 sq. ft. will be refurbished and a similar letting
strategy adopted as was employed at Aldermary House.
Michael Brown, Investment Director at Helical, commented: 'City retailing is
an emerging market and is one of the few areas in the retail sector
experiencing strong growth. Offices have always dominated in the City and as
a consequence there is an acute shortage of prominent, well configured units
suitable for flagship retailers'. Turning to the offices he said: 'At
Aldermary House we were running 100% occupancy levels and are keen to repeat
the formula at Gracechurch Street'.
BH2 acted for Helical Bar on both transactions, Ingleby Trice Kennard acted
for Frogmore and Richard Ellis St Quintin acted for NPI.
For further information, please contact:
Michael Brown Emma Denne
Investment Director Financial Dynamics
Helical Bar plc 0171 831 3113
0171 629 0113
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