Southern Housing Group is marketing its headquarters in Farringdon for offers over £40m.
The 55,309 sq ft Fleet House, EC1, is fully occupied by Southern Housing and Grimshaw Architects, providing a passing rent of £2,358,370 per annum, reflecting £42.64 per sq ft.
Southern Housing is proposing a short-term leaseback of the office until 25 March 2026.
The housing association said it would be responsible for the upkeep, repair and maintenance of the internal elements of its demise under the terms of the leaseback. Southern Housing’s service charge liability would be capped at £8 per sq ft.
Savills is marketing the asset as a refurbishment and repositioning opportunity as both occupational leases expire in March 2026.
Morrow + Lorraine has undertaken an initial study showing that the asset has potential to increase bulk and massing, enhancing amenity with 5,910 sq ft of terraces and providing an office building totalling 64,127 sq ft.
The £40m asking price reflects a net initial yield of 5.52%, assuming purchaser’s cost of 6.8%. It reflects a capital value of £723 per sq ft on the existing asset and £624 per sq ft on the proposed scheme.
Felix Rabeneck, head of city investment at Savills, said: “It is an excellent opportunity for an investor to undertake a major repositioning and refurbishment of a highly prominent building. The Farringdon submarket has seen exceptionally strong occupational demand, which has strengthened further since the opening of the Elizabeth Line”
Analysis of the office investment market in EC1 >>
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