Vantage Asset Management has bought a mixed-use block next to renowned department store Harrod’s in London’s Knightsbridge for £55m.
The 56,600 sq ft office building, at 145-161 Brompton Road was bought from Invista Real Estate reflecting an initial yield of 3.81%.
Jeremy Mudie, director of VAM, said although the initial yield is low the company is expecting to release more money from the property over the long term.
‘Although the initial yield is aggressive, this mixed use investment has a number of opportunities over the long term,’ said Jeremy Mudie, director of VAM.
The office, which is the West End headquarters for developer Grainger, includes 23,250 sq ft of shops let to Gap, Crabtree & Evelyn, Sunglass Hut and Pinko.
The building has 18,300 sq ft of offices let to a number of tenants and around 15,000 sq ft of residential.
The current rent is £2.2m a year but this will increase with a number of upward-only rent reviews in 2008.
Invista were selling the property on behalf of pension fund Clerical Medical Investment Group.
CBRE acted for Invista.