Meadow opts for £95m sale of government-let Victoria block

By James Buckley - Wednesday, May 16, 2018 15:00

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Meadow Partners has put up for sale its office development in London’s Victoria, single let to the UK government, for £95m, CoStar News can reveal.

Meadow Partners, which manages the buildings on behalf of North Carolina Retirement Systems, has instructed CBRE and Cushman & Wakefield to sell the building at 10-18 Victoria Street, SW1, for a net initial yield of 3.21%. The price reflects a capital value of £1,150 per sq ft, comparably low for the Victoria market.

The freehold building is single let to the UK government for a further 7.75 years off a reversionary rent of £37.99 per sq ft. The building produces a total income of circa £3.1m per annum.

Investors are likely to be attracted to the building given the possibility of regearing the government’s lease or, if it was to vacate the building, the significant massing potential on the site. Massing studies have indicated that a developer could increase the density on the site by up to 64%, meaning a scheme of more than 130,000 sq ft could be delivered.

Meadow Partners bought the late 1950s-built 10-18 Victoria Street, which comprises 81,597 sq ft of flexible office space arranged over lower ground, ground and nine upper floors, in July 2015 for £76m – a 3.73% yield.

In 1996, the tenant carried out a substantial refurbishment including adding a chilled ceiling air-conditioning system.

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