Investment into the office sector in the Eastern M25 market fell back to £421m in 2023, the lowest level of activity in 13 years. The two largest deals during the year were both in the South East London & Kent market, with Praxis agreeing a sale & leaseback on the 123,000 sq ft Bank of America House in Bromley for £20.7m, whilst the London Borough of Bromley purchased the 211,000 sq ft Churchill Court, also in Bromley for £20.5m. Early indications are that activity has remined muted in the first three months of 2024, with only four small transactions completing, the largest being Scarborough House’s sale of Personnel House in Welwyn Garden City to the palliative care charity Isabel Hospice.
Prime yields in the office sector remained stable in the six months to the end of Q1 2024, with average yields across the region standing at 8.25%. Yields have risen by 94 basis point on average over the past 12 months bringing the overall increase in yields to 1.94% since the interest rate shocks following the Liz Truss/Kwasi Kwarteng mini budget in September 2022. Prime yields in Docklands remain the lowest across the region, standing at 5.75% having moved up by 100 basis points since the ‘shock’. East London yields have shifted up by 175 basis points over the comparable period, rising to 7.25%. The rental growth outlook remains patchy over the next 12-18 months with occupational demand muted.
Paragon House, Chelmsford – IFDS Realty Ltd have sold the 31,470 sq ft Paragon House in Chelmsford to Marson Property for £5m. The property was vacant at the time of the purchase but there is outstanding determination on whether the property can be changed to residential under permitted development rights.
56-58 Marsh Wall, E14 – Olympian Homes purchased the 34,100 sq ft long leasehold office building from The Max Barney Estate for £1.05m. Olympian are proposing to redevelop the site to provide a 46 storey building with 795 co-living studios. The proposals will also include extensive improvements to the public realm and external amenity space.
Personnel House, Welwyn Garden City – care home provider Scarborough House Ltd sold the 16,120 sq ft Personnel House in Welwyn Garden City for £2.9m to Isobel Hospice for their own occupation. The property was vacant at the time of the sale and the palliative care charity has now moved to its new headquarters building.
Churchill Court, Bromley – the London Borough of Bromley purchased the 211,000 sq ft Churchill Court in Bromley from Direct Line Group for £20.5m. The council are to create a new Civic Centre at the site, moving from their current site at Stockwell Close in Bromley. The Churchill Court site was only partially occupied at the time of the purchase and includes two retail/leisure units.
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