Rocket fired up for £123m City buy

By James Buckley - Tuesday, October 09, 2018 8:58

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Private London-based investor and developer Rocket Properties is close to buying Ibex House in London’s tech belt for around £123m, CoStar News can reveal.

Rocket, led by Tom Appleton, is paying just over the £120m asking price following good interest in the building.

Israeli investor, Harel Insurance, formally instructed Allsop to sell Ibex House - its 191,000 sq ft City office development - in July for a net initial yield of 5.02% and a capital value of £647 per sq ft.

Ibex House, which is being sold freehold, sits in London’s Tech Belt, close to Aldgate and Whitechapel. The grade II listed Art Deco 1930s building stands on a 0.75-acre site and is multi-let to 28 tenants including the London Headquarters of PLP Architecture, Capita Business Services, BBC Media Action, Breast Cancer Now, Lark Group and Virgin Active.

Rocket is no stranger to the area having bought the Atlas Building on Old Street and, in 2015, securing a £240m development facility from Lloyds Bank, Bank of East Asia and ICBC to build out the development, comprising a 40-storey residential tower with 302 apartments, an 82,000 sq ft office building and 9,000 sq ft of retail space for shops, cafes and restaurants.

The weighted average unexpired term at Ibex House is 5.25 years to expiry and 2.98 years to the lease breaks.

The property is reversionary and produces a gross income of £6.43m per annum, reflecting £34.68 per sq ft overall, inclusive of vendor top ups. Harel will provide 12 months of rental top ups on all of the vacant units, which accounts for around 19,625 sq ft.

There are immediate active management opportunities to increase the rental income through refurbishment and re-letting of the vacant space and obtaining rental uplifts through the upcoming rent reviews and lease events.

There is also the possibility to reposition the building via a major refurbishment, which would inevitably appeal to the creative industries.

jbuckley@costar.co.uk

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