Cornerstone acquires Nexus Place
Cornerstone Real Estate Advisers Europe has acquired, on behalf of an institutional investor, Nexus Place, 25 Farringdon Street, for GBP128m at a yield of around 5.14 per cent from Tishman Speyer.
The acquisition, which follows shortly after Cornerstone Europe’s GBP94m purchase of 40 Gracechurch Street, is the second and largest acquisition undertaken by the company as part of a new Central London office investment mandate from a separate account client.
Tishman Speyer bought Nexus Place in 2007 and redeveloped the building, adding four new storeys and 50,000 sq ft. to the property, which is located on the east side of Farringdon Street in the City of London, opposite the site where Goldman Sachs is proposing to develop a new office building. Tishman Speyer let the building to 10 tenants, including Baker Tilly, Kroll and Johnson Matthey, and it now generates an annual rental income of approximately GBP6.7m with an average weighted unexpired lease term of 10.25 years.
The building provides 159,840 sq ft of Grade A office and ancillary retail space and benefits from a BREEAM “Very Good” rating following Tishman Speyer’s redevelopment which included the creation of four new floors, a new core, an aluminium and glass façade, as well as new energy-efficient plant to reposition the asset as a new building.
Nexus Place is extremely well connected with five stations within a five minute walk, including Farringdon which will be significantly enhanced with the opening of the new Crossrail interchange in 2018.
GM Real Estate advised Cornerstone; Jones Lang LaSalle and Hall Kemp acted for the vendor.
Nick Pink, chief investment officer at Cornerstone Europe, says: “The core attributes of Nexus Place, together with its position in a submarket which is both close in proximity to the Farringdon Crossrail and rapidly evolving to become the location of choice for a broad spectrum of occupier types are compelling. This acquisition demonstrates the range of risk and return profiles we will consider for this Central London office mandate, following our recent acquisition of 40 Gracechurch Street which provides a value add component to the growing portfolio.”
Dan Nicholson, head of UK acquisitions and asset management at Tishman Speyer, says: “We are very pleased to have successfully completed the business plan for this asset, having repositioned the property and leased it through a competitive market. The sale of the property to Cornerstone completes our recycling of the building, and we look forward to reinvesting the proceeds into the central London market.”