Derwent London has exchanged contracts to acquire Conoco House and Quadrant House at 230 Blackfriars Road, SE1 in Southwark, for £55.0m.
It has bought the 100-year leasehold interest in the property, where the ground rent is fixed at £5,000 per annum.
Conoco House, a 1970s office building comprising 60,300 sq ft, is multi-let at a passing rent of £2.1m (£41 per sq ft on average) with all leases expiring in 2025, with tenant breaks in 2023. The net initial yield is 3.5% which would rise to 4.2% on letting the 9,400 sq ft of vacant space. The acquisition cost, excluding Quadrant House, equates to £880 per sq ft on the existing space.
The adjoining Quadrant House is a 36-unit residential building let to 2074 at a nominal rent. Together they occupy a 0.8 acre site, which includes 30 car parking spaces, and has medium-term potential for a substantial office-led development.
Paul Williams, chief executive of Derwent London, said: “We are delighted to have exchanged contracts to acquire 230 Blackfriars Road, an exciting addition to our medium-term development pipeline, and which establishes a new village for us in the heart of South London’s Innovation Corridor and Health Science cluster in Southwark.”
DLN : Derwent London bags Southwark office for £55m