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City Developments (CDL) has bought an office tower in London’s financial district for £385 million (S$682 million) amid an expected tightening supply of space in the city.
The prime 26-storey freehold building at 125 Old Broad Street was formerly known as Stock Exchange Tower. It has panoramic views of the city, plus three basement levels and secured parking facilities.
The price translates to £1,170 per sq ft across its net lettable area (NLA) of 329,200 sq ft.
It is CDL’s second London commercial property buy this year.
The property provides a significant income stream with strong rental growth potential, CDL said in a statement yesterday.
Chief investment officer Frank Khoo said: “We have confidence in the long-term fundamentals of London as a global financial hub with a robust office market.
“The short-term uncertainties surrounding Brexit have presented us opportunities to acquire assets with deep value.”
The property provides a significant income stream with strong rental growth potential, CDL said in a statement yesterday.
Tenants include Cushman & Wakefield’s European headquarters, King & Spalding and China International Capital Corporation.
“With average passing rents currently about 25 per cent below prime average rents in the City of London, there is strong potential for positive rental reversions,” it noted.
The property is in London’s main financial district, and within walking distance from the Bank of England’s headquarters and overlooks St Paul’s Cathedral.
The block, which was built in the 1970s, housed the London Stock Exchange until 2004 and was significantly refurbished in 2008.
Mr Khoo added: “The tightening of London’s existing office stock and limited new supply will also drive rental growth into 2021.
“Given its excellent location in a diverse business district, 125 Old Broad Street will continue to attract a strong tenant mix from the finance, legal, insurance and technology/media/telecoms sectors.”
CDL acquired Aldgate House for £183 million in September.
The prime freehold Grade A commercial building in the heart of London’s Aldgate district has an NLA of about 211,000 sq ft.
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