Derwent London buys Brixton property

Real estate investor Derwent London has exchanged contracts to buy the freehold interest in Blue Star House in Brixton for £38.1m, before costs.

Derwent said it had agreed to add the 53,750 square foot eleven-storey building to its portfolio, providing it with multi-let office space - including two vacant floors, with restaurant and leisure accommodation at ground/podium level.

The rent on acquisition was £800,000, equating to a low average rent of £14.50 per square foot on the occupied office space. The acquisition price equated to a capital value of £710 per square foot.

Derwent said vacant possession could be achieved in the next few years and that there was scope to redevelop the site with "a significantly larger" scheme.

Chief executive Paul Williams said: "We are delighted to have acquired Blue Star House and added Brixton as a location within our portfolio.

"With its excellent connectivity to the West End, we see this as an exciting addition to our substantial development pipeline."

As of 0815 GMT, Derwent shares were down 0.44% at 4,102p.