Investor buys mobile phone seller’s headquarters in Acton in anticipation of transport premium.
Crosstree Real Estate Partners has invested outside of central London for the first time in an attempt to take advantage of the huge infrastructure investment going into west London.
The company, led by Sean Arnold and Nick Lyle, has bought a 4.5 acre site near Acton Main Line, where Crossrail is due to be operational from 2018, and close to Old Oak Common, where both Crossrail and, from 2026, High Speed 2 could be running. It is thought to have potential for a residential or student accommodation scheme.
It has bought Carphone Warehouse’s 151,653 sq ft headquarters at 1 Portal Way for around £40m, which reflects a 9% yield.
Crosstree is understood to have paid cash, and subsequently sourced debt from German bank Helaba. Carphone Warehouse sold the property to Crosstree in March to help reduce its debt ahead of its £471m buyout of Best Buy from its European joint venture the following month.
Carphone’s lease on the building does not expire until February 2023. It provides a current annual income of £3.6m or £23.73/sq ft with a fixed uplift in March 2017 to £4.2m per year or £27.51/sq ft. The building also includes a 164-space underground car park and a 71-space surface car park on the site. It has long-term, safe income but also has strong redevelopment potential as the building is only two storeys tall.
Given the increased investment and development activity within the area it is thought that the site could have the potential for a much higher-rise development.
Earlier this month CBRE reported that house prices around the 37 Crossrail stations have increased by 20% since it was given the go-ahead in 2008 (Crossrail is ticket to massive house price hikes, 06.12.13). The research said that house prices will increase by 2.9% per year or £50,000 per property over the next five years.
Crosstree has only previously bought in central London since its establishment in 2011 with backing from Swiss pharmaceuticals billionaire Ernesto Bertarelli.
It is currently undertaking the redevelopment of a three acre site next to Old Street Roundabout in a joint venture with Helical Bar to extend by 105,000 sq ft and refurbish 207/211 Old Street into a 316,000 sq ft office scheme.
Montagu Evans acted for Carphone Warehouse on the disposal. Jones Lang LaSalle advised Crosstree.