Picton has completed the freehold acquisition of Charlotte Terrace, Hammersmith Road, W14 for £13.7 million.
Charlotte Terrace comprises four adjoining buildings, which total 28,500 sq ft of office space and 4,400q ft of retail space, arranged over five floors. The property was redeveloped behind the façade in 1990 and is Grade II listed, meaning there is no business rates payable on void units.
The property is located close to Olympia, which is currently undergoing a £1 billion redevelopment delivering a new creative district, with a new theatre, entertainment venue, hotel, office, retail and leisure space, which will enhance the surrounding area.
The current annual rental income is £0.5 million equating to £34 per sq ft. The office space is let to seven occupiers and the retail space is let to two occupiers. This is expected to rise to over £1.1 million once the remaining units are leased. To improve occupancy, Picton will upgrade the offices and rollout SwiftSpace, its recently launched flexible lease offering.
The purchase price reflects a net initial yield of 3.3%, rising to over 8% once fully let and reflecting a low capital value of £417 per sq ft, which is below its estimated replacement cost.
The Company has funded the acquisition from existing cash resources.
"We have taken advantage of our diversified approach to invest in a mixed-use asset where we believe we can unlock significant income and value with our occupier focused asset management approach. In addition, we think this area will be significantly enhanced once the Olympia scheme is delivered over the next few years."
Michael Morris Chief Executive