The company has bought 30 Crown Place, which totals 198,000 sq ft, from the Greycoat Central London Office Fund. The price reflects a net initial yield of 5.1% but the rent is highly reversionary.
The annual rent roll is £7.16m a year, reflecting a rent on the office space of £37.30/sq ft. The next rent review is in 2015 and current prime City office rents are above £50/sq ft.
Completed in 2009, the property is 85% occupied by law firm Pinsent Masons and 15% by Crown Place Financial.
Pinsent Masons occupies the space on a 20-year lease ending in 2030. When Crown Financial’s lease expires in five years time Pinsent Masons will take over the rest of the building.
Hannover said the property would be added to one of its a closed-end real estate funds in the third quarter.
Hannover Leasing was advised by Franc Warwick. Greycoat Central London Office Development Fund was advised by CB Richard Ellis.
Two of London’s top developers have reunited to work on a £420m office tower in the Square Mile for Italy’s largest insurance company, Generali. Peter Thornton and Chris Strickland, who split amicably 11 years ago, signed heads of terms this week to act as the development manager for Generali’s site at Fenchurch Street in the City.
Greycoat Core, a joint venture company set up by Thornton’s Greycoat and Strickland’s Core, was chosen ahead of a stellar field of developers, thought to include Stanhope, Development Securities and Hammerson. The site at 116-120 Fenchurch Street and 10-14 Fenchurch Avenue was granted consent in September 2008 for around 400,000 sq ft of office-based space in a 15-storey tower.
Greycoat Core intends to submit a revised planning consent in the summer for slightly more space – around 420,000 sq ft – but will retain the architect, Eric Parry.
“It is a very large and complex scheme,” said Thornton. “It has a combination of normal development issues and some sub-issues, such as ownership and rights of light. It suited our combined skill set.”
Generali controls the site through a mix of freeholds and leaseholds in a vehicle called Saxon Land, which it formed with Australian fund manager Babcock & Brown a decade ago. When Babcock & Brown collapsed in March 2009, Generali bought its stake out and sought a development manager at the end of last year.
Thornton said the scheme would probably not start without a prelet in place. “Generali is really up for doing the scheme, but starting it speculatively would be a big call,” he said. Like many other larger developers, Thornton and Strickland believe the City office market will be starved of new space in the next three years.
The advertising consultants join University of Westminster in the 90,000 sq ft building which is now fully occupied.
The building allows the various trading subsidiaries of the Cossette Group to come together under one roof for the first time.
Their extensive fit out includes client meeting & entertainment areas on the top three floors, an auditorium, full catering facilities and a library.
This new London HQ will bring together Pinsent Mason staff currently housed in three separate London locations.
The appointment is for Wellington House, which is located to the south of Covent Garden, overlooking Aldwych.
The building’s office head lease expires early next year. It will then be subject to a major refurbishment to provide almost 40,000 sq ft of office and ancillary space, which is due for completion in the third quarter of 2012.
Greycoat chairman Peter Thornton said: “The impact of very low development starts in Midtown over the past 18 months means that Wellington House will come to the market when there is a considerable lack of development stock”.
Letting agents will be CB Richard Ellis and Farebrother.