Legal & General Property, on behalf of its Managed Fund, has purchased the freehold interest in 26 Red Lion Square, London WC1, from a client of Savills for approximately GBP57m.

The purchase price reflects a net initial yield of 8.12 per cent.

26 Red Lion Square (pictured) is a grade A midtown headquarters providing about 107,000 square feet of office accommodation over seven floors, located close to Holborn tube station.

Build in 1989, the property has been let to Cable & Wireless since its completion. Cable & Wireless has now sub-let much of the space to The Economist and TSL Education and currently occupies the third floor.

The lease expires in January 2023 and there is a tenant break option in February 2013.

Gordon Aitchison, head of transactions at Legal & General Property, says: “We had to move quickly to secure this investment, which we believe offers exceptional added value potential over the next few years. The move back into the Central London office market early in the cycle underpins our belief in strong rental growth prospects in core locations.”