Workspace spends £160m on listed City building

Workspace Group announced on Friday that it acquired Salisbury House at 28-31 Finsbury Circus, London EC2, for a cash consideration of £158.7m.

The FTSE 250 company said the building is held on a long leasehold from the City of London Corporation.

It described the Grade-II listed building as being “well located” in the heart of the City of London, near the new Crossrail station at Moorgate and a “short walk” from both Liverpool Street and Bank stations.

The building has a “distinctive Edwardian façade” and four entrances, which provide direct access to both Finsbury Circus and London Wall.

Workspace said the multi-let property has 240,000 square feet of net lettable space, and is currently 90% occupied with 105 customers.

It was being acquired at a capital value of £661.10 per square foot, a low average passing rent of £41.50 per square foot at a net initial yield of 5.0%.

The property has a gross asset value of £158.7m and generated net rental income of £8.1m over the last 12 months, Workspace’s board claimed.

It said the transaction would be funded from Workspace's existing resources, including an additional £100m of five-year revolver facilities provided by its bank lending syndicate under the existing overarching agreement.

The syndicate also provided a further £50m 364-day revolver facility for working capital purposes.

On a pro forma basis, the transaction - together with the acquisition of Fitzroy Street in April and the disposal of Uplands Business Park in May, and excluding costs - increased the loan-to-value ratio of the company to 22%, from the13% reported at 31 March.

“This is a property we have tracked for some time and we are delighted to add it to our portfolio,” said Workspace CEO Jamie Hopkins.

“The City has become an increasingly attractive area for our customers, and this well-located building is 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.”