CLS buys Aldgate property for £53.9m
CLS Holdings has exchanged contracts to acquire 9 Prescot Street, London E1 for £53.85m excluding costs, it announced on Wednesday.
The FTSE 250 commercial property investor said the freehold property comprised 96,948 square feet of multi-let office space over seven floors, and was 100% let to four tenants with a weighted average unexpired lease term of two years to breaks.
It is located on the fringe of the City in the Aldgate area, and is close to multiple key transport links including Fenchurch Street, Tower Hill, Aldgate East and Shadwell stations.
The property, which was being acquired at a capital value of £555 per square foot and a net initial yield of 4.5%, had “substantial” reversionary rental upside to deliver an estimated yield approaching 8% through active asset management, CLS claimed.
Current contracted rental income of £2.56m equated to £26.41 per square foot, with CLS intending to undertake a “substantial refurbishment” to deliver high-quality space in an improving area with limited supply.
CLS said it was intending to finance the acquisition through existing resources and bank financing.
“This acquisition is a clear demonstration of our ability to undertake transactions on an opportunistic basis where we can utilise our asset management expertise to deliver value over the long term in line with our strategy,” said chief executive officer Fredrik Widlund.
“The property's excellent location and attractive potential makes this an exciting acquisition for CLS.”