At 24/25 Britton Street, EC1, the shoe retailer Kurt Gieger’s office lease was due to expire in 2027. By agreeing a new 15-year lease, together with an uplifted rent, Kurt Geiger secured a long-term home for their business and we created an asset that had strong demand in the investment market. Accordingly, we sold the building in January 2020 for £64.5 million, 11.8% ahead of the March 2019 book value.
Recycling out of mature assets
We comprehensively refurbished the office element of the building in 2011 and subsequently let the space to Kurt Geiger. Situated in the heart of Clerkenwell, in close proximity to the Farringdon Crossrail station, the refurbished building provided 49,900 sq ft of high quality accommodation arranged over two lower ground, ground and three upper floors as well as two retail units fronting Britton Street (1,500 sq ft).
Last year, we re-geared the lease with Kurt Geiger, extending their term to 2035 and increasing the overall rent to £55 per sq ft, an 80% increase post refurbishment. Securing this long-term income, combined with a minimum rental uplift on review, created a highly desirable investment opportunity.
With our business plan complete, we sold 24/25 Britton Street, EC1, in January 2020 to an overseas investor for a headline sale price of £64.50 million, equating to £64.06 million after deduction of vendor top ups. The headline price reflects a net initial yield of 4.07% and a capital value of £1,255 per sq ft. The premium to the March 2019 valuation was 11.8% and the sale crystallised an ungeared IRR of 15.7% p.a. since the office element was refurbished in 2011.
