Workspace Group to buy Fitzrovia office building for £98.5m

Property investor Workspace Group is to buy the freehold of an office building in London's West End for £98.5m and turn it into a multi-let business centre.

The FTSE 250 company will buy the freehold of 13-17 Fitzroy Street in Fitzrovia at a capital value of £1,063 per square feet and a net yield of 4.6%, with the deal expected to close on 25 March, to be funded from existing facilities.

The office building is occupied and let to engineering firm Arup until September 2022 at an annual rent of £4.9m, rising to £6m in March 2021.

The company said that Arup will leave the building as the lease provides an early exit effective from September 2020 with a rolling nine-month break option.

Workspace said it is aiming to reposition the building as a multi-let business centre to capture significant rental uplifts.

Chief executive Jamie Hopkins said: "This is a really exciting purchase for Workspace, giving us a presence in an attractive location with a building ideally suited to our operational model.

“The transaction emphasises our commitment to expand further through targeted acquisitions, adding to our existing pipeline of refurbishment and redevelopment projects, to deliver superior value and returns to shareholders over the long-term."