Derwent London acquires Kingsway building

7th Jan 2014 10:09

Central London office property group Derwent London has snapped up an eight-story building near Covent Garden for 59.3m pounds. The office building at 22 Kingsway, which includes the freehold interest of the Peacock Theatre next door, yields a passing rent of £3m per year and has a rent review in September 2015. The property was purchased from Harel Insurance & Finance Group and Clal Insurance Group for £59.3m after costs, having been sold by Land Securities in 2009 for £39m. Excluding the theatre, the transaction reflects a capital value of £647 per square foot and a purchaser's net initial yield of 5.1%.Chief Executive John Burns said: "The off-market purchase of this prominent block provides an attractive initial yield, with good prospects for growth on review next year. "With the continued improvement of Covent Garden and the wider Midtown area, 22 Kingsway offers regeneration opportunities in the longer term."OH