At the end of January the Fund completed on the disposal of 90 Chancery Lane, London, to private overseas buyer reflecting a net initial yield of 3.68%.
This building was acquired in December 2004 for c.£17m at a yield of 7.1% and provided uninterrupted income until the Fund took an early lease surrender in 2012 in return for a substantial surrender premium from the tenant. The Fund then took the opportunity to carry out a comprehensive Grade A refurbishment, including a new reception, M&E and LED lighting, before reletting the building during 2013 to twelve different tenants on 10 year leases, with breaks at year 5.
When all break options had passed in 2018, the Fund carried out the rent reviews to maximise income receivable. Having owned the building for 15 years, fully refurbished and asset managed it, we decided to accept a very strong offer from an overseas investor. This asset delivered in excess of £17 million in income, doubled in value and achieved a 10% per annum IRR over its hold period.
