Derwent House, SheffieldProperty:Property-Modern, multi-let city centre offices
Area:65,000 sq ft
Claymore Role:Acquisition, Investment Management
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Acting on behalf of behalf of a UK fund manager / pension fund, this Value-add 65,700 sq multi-let ft office investment was acquired in April 2016 for c£8.7m, reflecting a net initial yield of 3.4% pa (£142 psf).
The property is fully air-conditioned and in an excellent city centre location adjoining the Heart of the City development, which has recently been chosen to house HSBC’s new regional HQ.
The business plan envisaged implementing an extensive refurbishment of the property including a new reception, cycle parking, showers and wc’s together with a Grade A refurbishment of c 40,000 sq ft, which was vacated prior to acquisition. Supply competition of good quality modern space is constrained, because of limited development in recent years and loss of stock to alternative uses – which is leading to rental growth. All but c4,000 sq ft was let to Mott Macdonald and SDL within the first 9 months of ownership.