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Workspace finances £158.7m City buy with £100m revolver

By James Buckley - Friday, June 23, 2017 9:49

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Workspace Group has completed its purchase of Salisbury House at 28-31 Finsbury Circus, for £158.7m, financing the deal part on balance sheet as well as with an additional £100m of five-year revolver facilities provided by its bank lending syndicate.

The deal was first revealed by CoStar News earlier this month and the building is held on a long leasehold from the City of London Corporation.

On a pro forma basis, the deal - together with the acquisition of Fitzroy Street in April 2017 and the disposal of Uplands Business Park in May 2017, and excluding costs - increases the LTV of 13% reported at 31 March 2017 to 22%.

The multi-let property, sold by Lone Star, provides 240,000 sq ft of net lettable space and is currently 90% occupied with 105 customers. It is being acquired at a capital value of £661.1 per sq. ft., a low average passing rent of £41.50 per sq. ft at a net initial yield of 5.0%.

The property has a gross asset value of £158.7m and generated net rental income of £8.1m over the last 12 months.

Workspace’s revolver was agreed under an existing overarching agreement and the banking syndicate has also provided a further £50m 364-day revolver facility for working capital purposes.

Jamie Hopkins, Chief Executive Officer, said: “This is a property we have tracked for some time and we are delighted to add it to our portfolio. The City has become an increasingly attractive area for our customers, and this well-located building is ideally suited to our operational model. The transaction emphasises our commitment to expand further through targeted acquisitions, adding to our existing pipeline of refurbishment and redevelopment projects, to deliver superior value and returns to shareholders over the long-term.”

Eastdil acted for Workspace; JLL advised Lone Star.

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