Orchard Street Investment Management has completed on the acquisition of Richmond Riverside, West London on behalf of St James’s Place from a fund advised by JP Morgan Asset Management, for GBP64.5m.
The sale price reflects a net initial yield of 4.9 per cent rising to 6.25 per cent once fully let and post settlement of two outstanding rent reviews.
Located on the banks of the River Thames at the corner of Richmond Bridge, Richmond Riverside is a premier mixed use development that forms part of Richmond’s historic town centre. Providing 132,965 sq ft of commercial space in total, the asset comprises six self-contained office blocks, eight high street retail units, three bars/restaurants, 28 long leasehold flats, a boathouse and 122 town centre car parking spaces.
The largest element of the office accommodation is let to ebay (UK), including PayPal and Gumtree, for its UK headquarters. Other office tenants include Serco and The Vitec Group. Occupiers within the retail and leisure element include Pitcher and Piano, Phase Eight and Whistles.
The property has an average unexpired lease term of 4.25 years, its mixed use nature providing multiple asset management opportunities to increase rental tone and income in an improving occupational market. Opportunities include completing a Grade A refurbishment and subsequent letting of Hill House (15,841 sq ft), settling outstanding rent reviews, regearing leases and enhancing the retail and leisure experience.
Barney Rowe, partner at Orchard Street, says: “Located in a super prime Thames-side location, Richmond Riverside provides a number of opportunities to increase the rental income through a program of active management activities. The desirable location means it is already home to some excellent covenants and with improving occupational demand in the local office, retail and leisure markets and limited supply we are confident it is well positioned for future growth and will deliver attractive returns to our client.”