M&G Real Estate has acquired the freehold interest of Riverside House on the Southbank of the Thames for GBP122m, equating to a net initial yield of 5.74 per cent.
The transaction is made on behalf of the M&G Property Portfolio, which is managed by Fiona Rowley and Justin Upton of M&G Real Estate.
Riverside House is a landmark building providing 171,936 sq ft of grade A office, retail and ancillary accommodation over 14 floors. The office space is let to The Office of Communications (OFCOM), the UK regulatory body for the communications industry, on a full repairing and insuring release. The lease runs until September 2022 at a rent of GBP7m per annum. The retail units are let to The Real Greek, Zizzi Ristorante and EAT at a total rent of GBP401,000 per annum.
The property occupies a prime central London location, on a site of approximately 0.6 acres, bounded by the River Thames to the north, Southwark Bridge Road to the east, the Bear Gardens to the west and Rose Alley to the south. It is in close proximity to key mainline and underground stations offering excellent communications. The area continues to undergo significant redevelopment making it one of Central London’s leading commercial, cultural and residential districts.
Rowley says: “We are very pleased with the purchase of Riverside House. Southbank is now an established central London market with a vibrant mix of uses and occupiers and we see strong rental growth and performance in the short and medium term.”
Robert Rankin, director at IVG UK, adds: “This sale realises the successful conclusion to our business plan for the property having purchased the building for GBP106m in Q1, 2005.”
M&G Real Estate was advised by GM Real Estate. CBRE and Knight Frank advised IVG (UK) Ltd.