Crosstree Real Estate Partners and minority joint venture partner Helical Bar have acquired four buildings adjacent to the Old Street Roundabout for £60.75m, financed with a £30.375m five-year development loan from HSBC.
The 287,000 sq ft freehold interest includes two large office buildings, 207 and 211 Old Street, currently let to multiple tenants at a rent of circa £2.1m per annum, and a retail parade immediately to the west of 207 Old Street at a rent of circa £0.7m per annum. A fourth building, Empire House at 136-144 City Road, is currently vacant.
The joint venture acquisition – split two-thirds to one-third in Crosstree’s favour – covers 3.12 acres in a part of central London which is at the forefront of regeneration in the capital, with interest from domestic and international technology and creative sectors.
Proposals for the site, which are being worked up by architects AHMM, comprise the refurbishment and remodelling of the two large office buildings, as well as the provision of new ‘incubator’ studios. Empire House will also be refurbished.
Crosstree, set up by Nick Lyle and Sean Arnold founded last summer and backed with up to £500m of capital from Italian billionaire Ernesto Bertarelli, is seeking to capitalise on the deleveraging cycle in the UK, targeting “unloved” real estate sold by banks and distressed sellers to create value.
Nick Lyle, founding partner of Crosstree, said: “The deleveraging cycle in UK property continues to present exceptional opportunities for well capitalised and experienced investors to substantially transform unloved properties into world-class assets, and we look forward to working closely with Helical to do so here.”
This is the second Crosstree development scheme closed in as many months, following Crosstree’s maiden purchase of 1 – 3 Berkeley Street mixed-use complex in Mayfair from Aviva Investors for £155m.
Crosstree financed 1 – 3 Berkeley Street with a five-year £82m senior loan provided equally by HSBC and Deutsche Hypothekenbank.
Gerald Kaye, development director at Helical Bar, said: “This is an extremely exciting opportunity for us to make our mark in a fast-improving area on the edge of the City of London.
“Crosstree and ourselves will be working closely with AHMM to develop the existing site into a comprehensive, dynamic scheme with creative thinking at its heart to attract the burgeoning number of TMT businesses.”
Crosstree and Helical were advised by Jones Lang LaSalle. CBRE and Savills acted for the vendor.