WELPUT sells prime Mayfair asset, Stratton House
The West End of London Property Unit Trust (“WELPUT”), managed by Schroders and advised by Grafton Advisors, has exchanged contracts to sell the freehold interest in Stratton House, 5 Stratton Street, London W1, to a private European investor for around £166 million. The sale price reflects a net initial yield of 4.2%, a net equivalent yield of 4.6% and a sales price of £1,670 per sq ft excluding the presold apartment.
WELPUT acquired the freehold interest in Stratton House in 2005. The strategy post purchase was to carry out an extensive refurbishment of the building and reposition it from a tired secondary asset to a prime Grade A office-based mixed use building. The work was completed in 2009. A specially created penthouse flat was sold at a record price in 2010. The offices were let at an average rent of £84 per sq ft across a diverse spread of strong covenant tenants. The top rent achieved was £106 per sq ft.
The Grade II landmark building, built in 1929, is opposite Green Park and the Ritz Hotel on Piccadilly, and next to Devonshire House in the heart of the West End. It provides a total of 108,000 sq ft of prime mixed-use accommodation over basement, ground and seven upper floors and residential on the eighth floor and is currently let to 12 tenants.
Nigel Kempner of Grafton Advisors and Head of Fund Management at Quintain Group plc, said:
“We have completed the repositioning of this property which, when acquired in 2005, was tired and in need of comprehensive refurbishment. Our team have created best in class accommodation enabling us to sell the new penthouse in early 2010 at a record Mayfair price and lease the offices at rents up to £106 per sq ft.
“We wanted to take advantage of the strong international investment market for prime West End investments and have sold at an attractive price, following good competition from all over the world, to a private European investor. We now look forward to using our expertise to reinvest in opportunities to use again our specialist management and development skills.”
William Hill, Head of Property at Schroders, added:
“Over the last three years Stratton House has been a significant driver of the performance of the Trust’s property portfolio which, at 15.7% per annum, has comfortably beaten the 12.7% per annum of the IPD Quarterly West End and Mid Town Office Index.
“We expect investor demand for ‘Super-Prime’ West End investments to continue and will be looking to reinvest capital in buildings which can be repositioned towards that market.”
DTZ and Strutt & Parker advised WELPUT on the sale, and Savills acted on behalf of the purchaser.
For trade press only
For further information, please contact:
Estelle Bibby, Schroders +44 (0)20 7658 3431 firstname.lastname@example.org
Dido Laurimore/Olivia Goodall FTI Consulting +44 (0)20 7831 3113
Nigel Kempner, Grafton Advisors +44 (0)20 7518 8000
Notes to editors:
West End of London Property Unit Trust (WELPUT) was established in 2001 as a closed ended property unit trust under the laws of Jersey. The aim of WELPUT is to provide investors with an exposure to the West End office market. The objective is to outperform the market as measured by Investment Property Databank (IPD).
The primary investment focus is office properties in the West End of London. Due to the nature of properties within the West End there will be elements of other uses such as retail and residential. WELPUT is reserved for experienced investors who must be aware of the risks attaching to the investment.
The manager of WELPUT is Schroder Property Managers (Jersey) Limited, one of the largest managers of Jersey Property Unit Trusts, covering various sectors of the UK market.
Grafton Advisors (2006) LLP is the property adviser to WELPUT and is a partnership formed by the former senior management of Benchmark Group PLC who founded WELPUT in 2001 and now a member of the Quintain Group plc.
Schroders has managed property funds since 1971 and has £9.6bn (EUR 11.5 billion / US$14.9 billion) of gross property assets under management (at 31 December 2011) and has approximately 90 property staff located in 9 offices across the UK and Europe.
All of the property funds referred to are unauthorised collective investment schemes as defined in the Financial Services and Markets Act 2000. Promotion of these funds is restricted and access to full information about these funds is only available to those exempt from the restriction.
For further information about Schroders’ property business visit www.schroderproperty.com.
Schroder Property Investment Management Limited and Schroder Investment Management Limited are authorised and regulated by the Financial Services Authority. Issued by Schroder Property Investment Management Limited. Registration no. 1188240 England.