British Land announced Wednesday that it has purchased Grenfell Island, a prime office and leisure scheme totaling 198,000 sq ft in Maidenhead town centre, for £74 million representing a net initial yield of 7.5%.
The property comprises 113,000 sq ft of high quality, flexible office space let to Hutchison 3G UK Ltd, as the UK headquarters of Hutchison Whampoa Ltd a leading global telecommunications and data services provider. The unexpired lease term is 9.5 years.
There is an additional 85,000 sq ft of leisure accommodation in an adjoining building anchored by a 10-screen Odeon cinema and health club. The weighted average lease length for the entire property is 10.7 years.
Grenfell Island was completed in 2000 and is situated opposite Maidenhead’s mainline railway station within the town centre’s core commercial district. Located just 30 miles from the centre of London, Maidenhead is considered to be one of the strongest South East office markets, attracting major occupiers such as Adobe, GlaxoSmithKline and Johnson & Johnson, as well as Hutchinson 3G.
Maidenhead will also be the western terminus for Crossrail, a high frequency rail service due for completion in 2018 which will provide the town with exceptional direct links not only to Heathrow Airport, but also to London’s key business districts in the West End, City and Canary Wharf.
Tim Roberts, Head of Offices at British Land commented that Grenfell Island is a modern, well let property in a town which is expected to be a major beneficiary of the investment in Crossrail. The acquisition provides British Land with an attractive income return in an improving occupier market and fits well within its strategic priority of creating sustainable and growing property rental streams, said Roberts.
According to Roberts, the area also has significant capital appreciation potential given both the future benefits of Crossrail and as the markets in the South East continues to improve. Knight Frank represented British Land and Lambert Smith Hampton acted for the private vendor.
British Land is one of Europe’s largest Real Estate Investment Trusts (REITs) with total assets, owned or managed, of £14.9 billion (British Land share £9.6 billion), as valued at 31 March 2011. Through its property and finance expertise, the company attracts experienced partners to create properties and environments which are home to over 1,000 different organizations and visited by over 250 million people each year.
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