Greycoat and Goldman Sachs have joined forces to acquire the latter’s former office accommodation block, Procession House, EC4, from LGIM Real Assets on behalf of its managed fund.
Savills had been instructed to find a buyer for the 105,944 sq ft building (which has planning permission for a refurbishment and extension) in February, marketing the building for more than £67.5m, representing a net initial yield of 6.15%.
Goldman Sachs has already vacated the eight-storey building as part of its plan to consolidate its London offices into a new headquarters at 40 Shoe Lane, EC4, but was still renting the building on a lease expiring in 2024, with a break option in September next year.
It is expected that the investment bank and Greycoat will look to start work on the renovation of the building, designed by John Robertson Architects, as soon as possible.
The City of London Corporation owns the freehold to Procession House, which is held on a long leasehold for a further 131 years geared to 5% of rents receivable, subject to a minimum ground rent. The current passing rent for offices is £4m pa, which reflects a low average of £40.50 per sq ft overall.
The retail units, which total just under 7,000 sq ft, are let to Co-operative Group Food, T.M. Lewin & Sons and Elvetham, with a vendor guarantee on the vacant retail unit, providing for an average weighted unexpired lease term on the let units of 12.5 years to expiries and 9.4 years to breaks. The passing rent on the retail accommodation is £441,200 pa.
Savills acted on behalf of seller Legal & General, with Cushman & Wakefield acting on behalf of Goldman Sachs and Greycoat.
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