Flexible office and co-working providers, Workspace Group, have exchanged contracts with Helical to buy The Shepherds Building in West London for £125.3m, reflecting a capital value of £835 per square foot. The price represents a net initial yield of 4.8%, rising to 5.1% on expiry of rent frees.
The sale is expected to complete next month, allowing Helical to focus on design led office and mixed-use schemes in London and Manchester. Gerald Kaye, CEO of Helical said: “We have enjoyed 18 strong years of ownership at The Shepherds Building. We took the decision to dispose of the asset as it will allow us to recycle our equity into new projects to create future profits.”
The Shepherds Building totals 150,000 square feet spread across eight floors and is currently 99% let to 32 different occupiers. The building was formerly an Inland Revenue tax office and was bought by Helical for £12.8m in 2000. The purchase was followed by a full refurbishment of the property and the addition of another floor.
Commenting on the announcement, the CEO of Workspace, Jamie Hopkins said: “This acquisition represents a great opportunity to invest the capital from our equity placing in June. The Shepherds Building is in an exciting and strategic location for Workspace. It is already home to a range of interesting customers and is ideally suited to our business centre model, providing scale, efficient floorplates and natural light throughout. We look forward to adding the property to our operational platform and driving returns over the long-term.”