Barings and LBS Acquires Southbank Office Development Scheme for £43.25 Million

Barings, one of the world’s largest diversified real estate investment managers, has completed the joint venture acquisition of an office development scheme in Southbank, London for £43.25 million. LBS, a London based developer, is Barings’ joint venture and development partner for the project. The development scheme was acquired from LaSalle Investment Management.

The site has full planning consent for the demolition of the existing Emmerson building and the development of c. 150,000 sq ft of new Grade A office space that will be built to the highest sustainability standards with the target of creating a net zero carbon building.

On completion, the new building will comprise 11 upper floors of high quality, Grade A office with a ground floor retail unit and complemented by 14,000 sq ft of affordable workspace at lower ground, ground and first floor.

Designed by renowned architects Squire & Partners, occupiers of the building will benefit from access to a wide range of amenities including a roof top communal terrace overlooking the Thames and the City of London, as well as 300 lockers, cycle storage for 284 bicycles, and 28 showers all on the lower ground floor.

Located in the heart of the ‘Bankside’ village of Southbank, the asset will benefit from easy access to both strong public transport infrastructure with Blackfriars, London Bridge and Waterloo train stations all a few minutes’ walk away, as well as the area’s extensive amenities and cultural landmarks including the Tate Modern, Shakespeare’s Globe and Borough Market.

Darren Hutchinson, Head of UK Real Estate Transactions and Managing Director at Barings, added: “We are pleased to have partnered with LBS who have an impressive track record of delivering similar schemes in London. We very much look forward to working with them to deliver a best in class scheme with strong ESG credentials and that will appeal to a wide range of occupiers and in a vibrant submarket, characterized by very low Grade A vacancy rates and high levels of demand.”

Gunther Deutsch, Head of Transactions Europe and Managing Director at Barings, commented: “This transaction represented a rare opportunity to acquire a well-located development site in a historically undersupplied and attractive submarket of London. We have strong convictions in the London office market and believe that there will continue to be strong demand for well-located Grade A office space with strong occupier appeal.”

Nick Crawford, Managing Director of LBS Properties Ltd, commented: “We are delighted to have secured this rare opportunity to deliver a best in class, highly sustainable office building of scale in one of London’s most attractive submarkets. We are pleased to be working with Barings, an investor with deep investment expertise across global real estate markets, and share a vision of creating a forward-looking office building, fit for a fast-evolving market, with the tenant experience our priority from day one. “

Chris Lewis, Fund Manager for Debt & Value-Add at LaSalle Investment Management, added: “This is an excellent example of value-creation for our client; we have delivered on our business plan to achieve a significant increase in building area through improved planning permission and retain the freehold. We are looking forward to LBS delivering on the scheme and working with them again in the future.”

LBS PROPERTIES SECURES LETTING AT 107 GRAY’S INN ROAD, WC1

Allsop, acting on behalf of development manager LBS Properties, has succeeded in securing a letting of a five-storey office building on Gray’s Inn Road in Clerkenwell, London, to Tetra Tech, a leading global consulting and engineering firm. Tetra Tech is listed on NASDAQ with a market cap in excess of USD 4bn.

Tetra Tech, represented by Ashwell London, will occupy a total of 6,600 sq ft at 107 Gray’s Inn Road across the ground, first and second floors, on a 10-year lease at £58 psf. This leaves a remaining 3,921 sq ft available across the third and fourth floors.

LBS Properties, acting as the property advisor on behalf of the Guernsey-based LBS Real Estate Investment fund, oversaw the comprehensive refurbishment of the building with Oktra appointed as architect and contractor. 107 Gray’s Inn Road provides a total of 10,521 sq ft of office space over five floors as well as facilities which include lockers, cycle parking, showers and a rear courtyard. It’s well positioned to benefit from numerous transport links including King’s Cross, Farringdon, Russell Square, Chancery Lane and Holborn tube stations and can take advantage from the lifestyle amenities on offer at Kings Cross.

James Neville, Partner, Allsop, said: “The letting at 107 Gray’s Inn Road is a really encouraging sign of positive movement in the market. We received a healthy amount of interest in the building despite lockdown. The location is certainly one of the strongest selling points for the property, with the occupiers benefiting from the upcoming Farringdon Cross Rail which is only a few minutes’ walk away as well as transport links and amenities on offer at King’s Cross. This, combined with the high spec fit out, makes an appealing option for tenants”.

Nick Crawford, Managing Director, LBS Properties, said: “With early leasing success, we are really pleased with the outcome at 107 Gray’s Inn Road. The mid-town location presents a fantastic proposition for tenants with excellent amenities and connectivity. The design concept of the building was to showcase the bones of the building yet reflect the local surroundings, with a combination of exposed ceilings, striking light fixtures and modern finishes. We are very proud of the outcome and look forward to welcoming Tetra Tech to the building.”

Allsop acted on behalf of Gray’s Inn Limited and LBS Properties.

Ashwell London acted on behalf of Tetra Tech.

LBS Properties disposes of Chapter House, 1 Cranwood Street, London for £45,500,000.00

On behalf of its client Chapter House Limited, LBS Properties has successfully sold Chapter House, a prime freehold central London investment opportunity, to RTP Global Real Estate Investments LP, a pan-European fund targeting prime assets for £45,500,000 reflecting a net initial yield of 4.48%.

Chapter House is located one street back from Old Street Roundabout in the heart of London’s tech and creative cluster.

A former Victorian School that was comprehensively refurbished and extended to a very high specification in 2019. The property, which originally dates back to 1887, offers a high specification with 4.5 metre floor to ceiling heights and external terraces, providing 32,323 sq ft of office accommodation arranged over lower ground, ground and four upper floors.

Chapter House, one of two adjoining buildings developed by LBS Properties is fully let to three tenants, Ebiquity Plc, Totally Money Limited and Recorded Future, with a passing rent of £2,202,552 per annum, equating to £68.00 per sq ft.

Nick Crawford, Managing Director of LBS Properties, says, we are delighted to have completed the sale of Chapter House to RTP Global Real Estate Investments LP. Through high quality of refurbishment, Chapter House has been transformed to a best in class office building in a prime Old Street location. This resulted in the property being 80% pre-let prior to completion.

LBS Properties were represented by Cushman & Wakefield and Colliers. Crossland Otter Hunt acted for the purchaser.

LBS PROPERTIES SECURES BLOOMSBURY OFFICE FOR DEVELOPMENT AS PART OF NEW FUND LAUNCH

Award-winning London developer and asset manager LBS Properties has completed on the purchase of 107 Grays Inn Road, a 14,000 sq ft multi-tenanted office building in Bloomsbury, for £7.1m.

The acquisition marks the first transaction for the new Guernsey-based LBS Real Estate Investment Fund, to which LBS Properties is sole Property Advisor. The new fund’s strategy is to invest in value-add commercial opportunities across London.

LBS Properties plans to undertake a full internal and external refurbishment of the building, which spans five floors, with work due to complete in Q1 2020. Located in what is known as London’s ‘Midtown’, 107 Grays Inn road enjoys a good location within a ten minute walk of Farringdon, Chancery Lane and Russell Square stations, while also being less than a mile from Kings Cross.

Nick Crawford, Managing Director of LBS Properties, comment: “This marks a significant acquisition in the Midtown area, which is currently suffering from a record low of quality new office supply coming to market. We will undertake a comprehensive refurbishment, delivering prime office space that will appeal to the area’s increasingly diverse tenant base which includes professional services, TMT and legal firms. There is a continually improving food, beverage and retail offering in the area, making it an attractive destination for occupiers.”

“The new Fund will continue to seek opportunities where we can leverage our development and asset management expertise to add value in a relatively short space of time by refurbishing and repositioning buildings that benefit from good fundamentals.”

LBS PROPERTIES LAUNCHES SCRIPT EC1 AFTER RECEIVING PLANNING FOR OLD STREET OFFICE TRANSFORMATION

Award-winning London developer and asset manager LBS Properties has been granted planning permission by Islington Council for the redevelopment of the Defoe Court building at 44 Featherstone Street EC1, to provide 51,000 sq. ft of prime office space. The project has been launched to the market this month as Script EC1.

Designed by Thirdway Architecture, the development will include the delivery of an additional seventh storey with roof terrace, a complete external and internal refurbishment, provision of cycle storage and new facilities, which will create an exemplar scheme just 150 metres from the iconic Old Street roundabout.

LBS Properties acquired the freehold office building last year from Paris-headquartered Amundi Asset Management. It sits among the area’s thriving tech and media cluster which includes blue chip occupiers as well as fast growing start-ups. In addition to Old Street station just moments away, the building is in close proximity to Moorgate and Liverpool Street stations, with the new Elizabeth Line services due to open soon.

LBS Properties has a proven track record in the area, having recently developed Chapter House, providing over 34,000 sq. ft of accommodation which was almost entirely pre-let prior to launch, as well as the adjoining Verse building which has just launched, providing over 16,000 sq. ft of accommodation.

Nick Crawford, Managing Director of LBS Properties, comments: “The Old Street area continues to thrive as a prime city-fringe office location, with strong tenant demand leading to record rents being set in recent months for the best buildings. The redevelopment of Defoe Court will deliver another high-quality office building with excellent amenities at a time when there is limited new supply coming to market. Our previous Chapter House project just across Old Street roundabout was very well received, and is now 100% let, shortly after it completed.”

Work is due to commence immediately with completion expected in Q3 2020.

LBS SECURES £70M REFINANCING FROM BENTALLGREENOAK FOR TRIO OF LONDON OFFICE PROJECTS

On behalf of client ED Group, award-winning London developer and asset manager LBS Properties has completed a circa £70M refinancing with BentallGreenOak for three significant office projects in London. The investment debt package supersedes previous development funding from Cheyne Capital.

The three projects include 70 White Lion Street, a new 36,000 sq. ft. office scheme in Angel, N1 which was 100% pre-let to Spaces (part of IWG) and completed in July 2019.

And in nearby Old Street, LBS Properties has recently launched Chapter House – one of two buildings being developed adjacent to Old Street Roundabout, designed by the renowned Buckley Grey Yeoman architects and collectively known as ‘Chapter and Verse.’ Chapter House, a converted former Victorian school building completed in May 2019, provides c.34,000 sq. ft. of new office space and is currently 80% let to Ebiquity and TotallyMoney, while the adjoining new-build Verse building will provide circa 16,000 sq. ft. of space and is due to complete in September.

The deal marks ED Group and LBS Properties’ third funding deal with BentallGreenOak, following its acquisition of the old Mecca Bingo Hall on Hackney Road – now a residential scheme known as HKR Hoxton – and the £32m Defoe Court office acquisition last year.

Nick Crawford, Managing Director of LBS Properties, comments: “We are delighted to have completed another financing with BentallGreenOak. Over the last two years we have developed three high-quality office buildings in excellent, City Fringe locations, with White Lion Street and Chapter House close to fully let shortly after completion, and Verse Building due to deliver 16,000 square feet to the Old Street market in September this year. This financing will support the transition from development through to stabilisation, and facilitate ED Group’s strategy to hold these assets, in light of the continued shortage of high-quality office space in these submarkets.”

Martin Sheridan, UK Debt Principal at BentallGreenOak, comments: “BentallGreenOak is pleased to have supported LBS Properties on yet another successful Central London office project. This transaction further underlines our ability to provide our borrower’s with wide-ranging and large-scale financing solutions across the capital structure for stabilised, value add and development assets.”

HFF advised the borrowers.