Southwark commercial and residential property acquired for £55m

A London headquartered property investment firm has announced the acquisition of a 100-year leasehold in Southwark.

Derwent London has exchanged contracts to acquire the leasehold interest in Conoco House and Quadrant House at 230 Blackfriars Road SE1 for £55m before costs.

Conoco House, a 1970s office building comprising 60,300 sq ft, is multi-let at a passing rent of £2.1m (£41 per sq ft on average) with all leases expiring in 2025, with tenant breaks in 2023.

The net initial yield is 3.5 per cent which would rise to around 4.2 per cent on letting the 9,400 sq ft of vacant space. The acquisition cost, excluding Quadrant House, equates to £880 per sq ft on the existing space.

The adjoining Quadrant House is a 36-unit residential building let to 2074 at a nominal rent. Together they occupy a 0.8 acre site, which includes 30 car parking spaces, and has medium-term potential for a substantial office-led development.

Paul Williams, Chief Executive of Derwent London, said: “We are delighted to have exchanged contracts to acquire 230 Blackfriars Road, an exciting addition to our medium-term development pipeline, and which establishes a new village for us in the heart of South London’s Innovation Corridor and Health Science cluster in Southwark.”

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