Spelthorne council in for circa £170m 12 Hammersmith Grove

By Paul Norman - Monday, January 08, 2018 14:57

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Spelthorne council is set to buy 12 Hammersmith Grove from Aberdeen Asset Management for circa £170m, a 5.25% yield, CoStar News can reveal.

The 167,000 sq ft office over eleven floors along with new restaurant space and additional public realm was built speculatively by U+I backed by Aberdeen with construction starting May 2014 and completing February 2016.

It is now almost fully let after leasing up quickly with notable tenants including WeWork, occupying just over 50,000 sq ft, Creative Artists Agency, Perform Media Services and Medidata.

Perform is understood to have signed for a further 17,000 sq ft floor over the Christmas period taking it close to fully occupancy.

Aberdeen Asset Management, then SWIP Property Trust, agreed a £92m forward-funding deal for 12 Hammersmith Grove with Development Securities, now U+I, in 2014.

The scheme was the second and final phase of a 375,000 sq ft office-led regeneration scheme in the centre of Hammersmith.

The first phase of the development, 10 Hammersmith Grove, was also funded by SWIP Property Trust for £50m in October 2011. Comprising 110,000 sq ft of prime offices, three restaurant units and 6,000 sq ft of public realm, the first phase was completed in July 2013.

Developed on the site of a former car park, 10 and 12 Hammersmith Grove are a significant new commercial and leisure destination in the centre of Hammersmith adjacent to the underground station.

10 Hammersmith Grove has been one of the most notable London office assets in recent times in terms of its performance in the capital markets.

Hong Kong investor Tai United Holdings sold it in October of last year for £112m in what was the third time the property has traded in the last 12 months.

The building was bought by Blue Horizon Investors, a private investor, paying a net initial yield of 4.93%.  

Tai United, a Hong Kong-listed group which is more used to trading medical equipment and mining tungsten in Mongolia, bought the building in November 2015 from Brockton subsidiary Leon Property Holdings for £103.5m, reflecting a net initial yield of 5.33% on the SPV and a capital value of £843 per sq ft.

Aberdeen developed 10 Hammersmith Grove, the fully leased 122,744 sq ft office scheme with U+I before selling it to Brockton for around £89m.

Spelthorne council has been one of the most notable protagonists in recent months as local authorities have increased their investment in real estate assets.

Spelthorne has said the withdrawal of Government funding for local authorities means that many councils are having to find new ways to fund services by creating new revenue streams and its acquisitions represent a significant step in Spelthorne council’s plan to tackle the cuts.

Previous acquisitions by Spelthorne Borough Council include the BP campus in Sunbury-on-Thames in September 2016 for circa £340m and Elmbrook House, also in Sunbury, in January 2017 as well as 3 Roundwood Avenue at Stockley Park near Heathrow.

Cushman & Wakefield is advising Spelthorne Council. JLL is advising Aberdeen.

Leasing agents on 12 Hammersmith Grove are BNP Paribas Real Estate and JLL.

pnorman@costar.co.uk

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