Addington (“Addington”) and BauMont Real Estate Capital (“BauMont”) have completed the purchase of Old Change House, 128 Queen Victoria Street, EC4 for around £23 million, showing a yield on contracted income of 6.55%. The vendor was Coal Pensions Limited advised by Delancey.
Old Change House is a 56,814 sq. ft detached office building with basement, ground and five upper floors including 3,732 sq. ft of ground floor retail. The building is currently 61% occupied, with existing office tenants including Walker Crips plc, GB Group plc, EZE Software EMEA Ltd and the Monetary Authority of Singapore. Retail tenants are Pret a Manger and Pen and Brush Limited (trading as Nusa Kitchen).
The building was originally constructed by Japanese developer, Nissho Iwai in 1997, before being acquired by Coal Pensions Limited in 2000. It was partly refurbished in 2018, including new end of trip facilities. It has been sold to BauMont and Addington with two vacant office floors totalling 18,600 sq. ft. Further leases expire in 2025 and 2027.
BauMont and Addington believe the purchase provides an outstanding opportunity to complete the refurbishment of the building to create “best in class” Cat A specified offices, with enhanced ESG credentials. The refurbishment is well timed to take advantage of a shortage in top quality offices in the City, which they believe will provide the potential for higher rental levels being achieved in the building, whilst re-establishing its institutional credentials.
Martin Roberts, Principal of Addington Capital said, “The opportunity to undertake a rolling refurbishment programme of an income producing asset like Old Change House offers attractive risk adjusted returns. We are actively pursuing similar “brown to green” projects across Central London, allowing us to upgrade buildings with strong fundamentals to create the high quality, ESG-compliant space, sought after by today’s occupiers. We believe that there will be other similar opportunities over the coming months.”
He added, “ We are delighted to extend our working relationship with BauMont, with whom we have worked on three residential projects* in the London area. This is our first venture together into the commercial property markets.
Delancey was advised by Knight Frank and Addington Capital by Savills.
*Including the acquisition of the Brymore portfolio of 182 houses and apartments in South London in 2019, the acquisition of the Skye portfolio of 114 houses and apartments in East London in 2021 and the acquisition of the Keys portfolio of 204 houses and apartments in East London in 2022.
